You have spent much time here, and I thank you, and AITpro also for being such a gracious host and even jumping in a bit.
Take a look at this plugin:
http://wordpress.org/extend/plugins/ie-css3-support/
I have that plugin active on one of my sites at the moment, and I will activate it on the other in a few minutes. Cool Clock was working perfectly in IE8 for a while at my first site with that plugin active this morning, so that plugin has whatever we have been looking for here. However, the clock again disappeared immediately after I had refreshed IE8, and I believe that has something to do with some kind of cache at my server. Yesterday I had to completely remove all plugins and revert back to a default theme for just long enough to flush something somewhere in order to get various things working again. So, we might never get Cool Clock working 100% at my server, but now we do know it can work and that the IS CSS3 Support plugin can get that done until my server somehow messes things up.
Many thanks!