jrraines:
I was curious as to how you checked for the busy flag and looked at your code. It seems to me you have a bus issue that may damage the LCD and/or the Arduino when checking the busy flag.
The way I read the HD44780 datasheet is that the full bus (8 datalines) will be reversed when you pulse EN and RW is low. In your code however you only reverse the Arduino busy bit (B7) to input. The other bits (B0 to B3 for 4-bit and B0-B6 for 8-bit) will then be low impedance output as will the Arduino pins. If the LCD/Arduino outputs are at opposing logic levels you will have a dangerous short.
Did I miss something or are you reading the datasheet differently?