You make some valid points there Steve.
Well, I don't pretend that I understand everything in the Old Testament so I can't answer all of them.

However I stand by my opinion that good people don't torment others even if that doesn't quite fit in the Old Testament style. Even more I believe they don't predestine sentient or even non-sentient creatures in order to suffer.
As for rewarding evil deeds so the creature in question walks down the evil path so he turns back in its own free will... well they could not curse/reward the evil deed in the first place.

As for Good AND evil DP: Well, I play them quite that way too. They are 13 IMC not 9, I haven't decided on so specific alignments and a minority is either good or at least neutral. They also fearful of other more powerful deities.
My take on the Unspoken Pact is: "You big guys don't get in here but we abide to some restrictions too, like giving the people you protect some chance at least."