Quote - ... that's when IL washes out the AO and oversaturates the character.

Possibly you missed this point: using IDL does not 'wash out' the light-based AO, it switches it off completely. It's no surprise you can't see any AO in picture #3 - there is none.

I agree, picture #2 is superb. 

"If I were a shadow, I know I wouldn't like to be half of what I should be."
Mr Otsuka, the old black tomcat in Kafka on the Shore (Haruki Murakami)