Christian Davideck, thank you. That was simply the solution! Because my file was a very high resolution, the preview of the layer blending in the unflattened image looked radically different to the rendered version of the blending when flattened. Hence, when I lowered the resolution, the unflattened preview and the flattened final looked almost identical. Similarly, in the original file, if I zoomed in, the unflattened and flattened versions looked identical. I take back all the bad things I said about Photoshop. Sure inaccuracy of previews while editing are annoying, especially the change in appearance at different zoom levels, but the flaw is nowhere near as heinous as I imagined. I am not sure if this is a solution to StrongBeaver's original problem, but it might help...
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