The reason you are getting flickering is because of your off screen setting. Try making it higher or lower to stop the flickering but that is no guarrantee that the flickering will stop and depending on the setting you might start getting trash on the screen. Ii use 3 as you have it set and I still get flickering on some games. Maybe this will be fixed in the next release.
It could be mask bit. I have a TNT2 ultra and use pretty much the same config as you without flickering. my off screen drawing is set to option 3 like you, but I don't use mask bit. This is just a guess.
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