Thanks, Don, the above is fantastic. I've not really thought about that Metrodorus fragment, that's great--and it's very similar to Plutarch, Non Posse 1089d, which I have thought about much more. I've often been a bit unsure how to understand this claim. It's similar to PD 18 in establishing mental katastematic pleasure on the foundation of bodily katastematic pleasure. But, as Plutarch points out in Non Posse 1089e-f, that's an extremely unstable foundation for katastematic pleasure, both because lots of conditions disrupt bodily katastematic pleasure, and because it's possible for bodily katastematic pleasure to be disrupted at any time so we can't actually securely anticipate it (whereas we can anticipate mental katastematic pleasure more easily). (I have a paper in progress on that Plutarch argument.)
Your proposal about katastematic pleasure is very plausible. To be honest, I want to believe it, but (in addition to the problem in the last paragraph) I don't know how it can allow pleasure to be stable or to be a limit. The Diogenes of Oenoanda passage is helpful (and sounds like the end of the Letter to Herodotus). The question is just what's up with pain there. Epicurus does clearly care about bodily pain, and it's hard to eliminate the fear of that. So the challenge for your position (which I think is the most popular) is to explain what's stable about the state that results once we remove mental fears and anxieties. (I think I mentioned upthread that I think the best way to do this is to claim that bodily katastematic pleasure is only the fulfillment of needs, not the absence of other pains; but most people find this proposal wildly implausible.)