I seem to agree with all of the above statements. The conditional probabilities are indeed this way. But it's incorrect to use these conditional probabilities (which is to say, probabilities of Odd/Even after updating on observing "even") to compute expected utility for the counterfactual.
No. There is no problem with using conditional probabilities if you use the correct conditional probabilities, that is the probabilities from wherever the decision happens, not from what you personally encounter. And I never claimed that any of the pieces you were quoting were part of an updateless analysis, just that it made no difference.
I would try to write a Wei Dai style world program at this point, but I know no programming at all and am unsure how drawing at random is supposed to be represented. It would be the same as the program for this game, though:
1 black and 99 white balls in an urn. You prefer white balls. You may decide to draw a ball and change all balls of the other color to balls of the color drawn, and must decide before the draw is made. (or to make it slightly more complicated: Someone else secretly flips a coin whether you get points for black or white balls. You get 99 balls of the color you get points for and one ball of the other color).
It would help a lot if you just wrote the formulas you use for computing expected utility (or the probabilities you named) in symbols, as in P(Odd|"odd")=0.99,
P(Odd|"odd")*100+P(Even|"odd")*0 = 0.99*100+0.01*0 = 99.
Consider the following thought experiment ("Counterfactual Calculation"):
Should you write "even" on the counterfactual test sheet, given that you're 99% sure that the answer is "even"?
This thought experiment contrasts "logical knowledge" (the usual kind) and "observational knowledge" (what you get when you look at a calculator display). The kind of knowledge you obtain by observing things is not like the kind of knowledge you obtain by thinking yourself. What is the difference (if there actually is a difference)? Why does observational knowledge work in your own possible worlds, but not in counterfactuals? How much of logical knowledge is like observational knowledge, and what are the conditions of its applicability? Can things that we consider "logical knowledge" fail to apply to some counterfactuals?
(Updateless analysis would say "observational knowledge is not knowledge" or that it's knowledge only in the sense that you should bet a certain way. This doesn't analyze the intuition of knowing the result after looking at a calculator display. There is a very salient sense in which the result becomes known, and the purpose of this thought experiment is to explore some of counterintuitive properties of such knowledge.)