First of all -- wow. A really complimentary review. I'm glad you liked the game so much.
Also, a really thoughtful review. I agree that there is a lot of depth to the game, and one of my worries was that it wouldn't really be apparent on a first reading. You do an excellent job outlining what I see as the core strategies of the game.
Warning to Judges
From this point on I'm going to be correcting some of Doug's misreadings, and also making some adjustments to the rules and giving new examples. If you feel like this will influence your judging stop reading now.
Examples all being Confucious -- This is my major frustration with the game text, too. I really wanted to have many more philsophical schools in the book as examples (Laozi, Chuangzi, Mengzi, Mozi, Hanfeizi, the Yangists) and also have examples of "importing" other philosophies into the game (Nietschze becoming Nizi and Machiavelli becoming Mazi), but unfortunately I ran out of time to write them. I'm maybe going to include some as a second post, for the curious.
Although I would argue that the Confucians only won one of the victories (The Legalists won the political victory and the Taoists won the moral victory, historically, as far as I can tell.)
Typo in the setup section -- the correct value is 2x number of players + 1 I changed it right at the last minute (literally at 11:55) and must have not caught that.

In truth, you can vary the length of game by changing that number to anything in between the two, although in the long game you should keep your eyes open for the "all Chinese states influenced" endgame condition.
Now here's a point where you seem to be confused about the rules -- the rules as I read them say that there can only be one influence token on a state at any time. So there isn't so much "building up." Furthermore, influence tokens are not judgment tokens -- the ruler's judgment token is removed from play after it is revealed. I like the idea that philosophy's could share influence in a state, perhaps sharing the political points, although it is less historically accurate.
Likewise, I can't figure out how there is that much of a political motivation in terms of the moral judgments. The moral judgments are only made by non-active players (not the philosopher nor the ruler) and they have no effect on the political game save as one of the forms of endgame. Is the endgame what you mean by that?
As for the situation where players moves are locked, this is a bit of a sticky wicket. As far as I can tell, the most problematic states are the Zhou capital and Zhongshan, with Chaoxian and Teng as secondary problems.
Zhongshan I would probably revise to give mutual connection to Xiongnu, Donghu, or both. This is actually quasi-historical, if you shift the time period around a little bit.
As for Zhou, I'm not entirely sure that it is a problem. I rather like the idea of a philosopher being stuck in the capital, unable to reach the outside world -- very indicative of the Warring States, in fact. It is a very powerful state, and I like that there is some risk associated with trying to influence it.
However, I will probably revise the rules to say something like "If you are made Minister in the Zhou capital, you get a free move to any Chinese state." That would probably resolve that.
As for Chaoxian, I don't see it as being a problem simply because, frankly, I don't see a lot of people travelling to the Barbarian States unless they have to. It would be easily resolved by giving it an ocean connection to Yue two way or even giving it a one-way ocean connection to Qi.
As for Teng, we'd have to wait and see if this sort of thing is really a problem.
Perhaps I could make a rule: If your Shi moves into a state where he is exiled, either by necessity or by choice, he and his companion are, in fact, executed. Remove your pawn from the board. On your next turn, you may place your pawn on any State that you have Rulership over -- a new philosopher in your tradition has emerged.
Losing a turn is a pretty hefty penalty, I think, to avoid casual death.
yrs--
--Ben