Some notes from the .quide
Towards the end of your S:startup-sequence file, find the line that reads 'LoadWB'. Change this line too...
LoadWB SIMPLEGELS
...and on the line before it, enter the command...
WBCtrl IMT=ICONFAST
Note that with this configuration you will no longer get the transparent effect for dragged icons.
If you use MCP you should disable QuickDraw and enable QuickLayers. Neither of these steps is necessary, but this is currently the best configuration for operation with FBlit.
Did you do that too ?