However, I agree with you that the optically-read paper ballots are an effective way to run elections. But most of the vote-fraud is done outside of any machines, and is just as easy with your system as with the Diebold system.
It means it's impossible for anyone to be sure there aren't any 'back doors' in the system.
It would be very easy to test for the kind of thing you described in your previous post, which would be caught immediately by the current start-up testing.
Suppose the machine were set up so that it would count all Bush and Nader votes as Kerry votes between the time it saw one particular odd combination of candidate selections and another particular odd combination. One operative of fraud goes in shortly after the election starts and cast his "special" vote. Another goes in shortly before polls close. Testing the machine before and after the election will show nothing amiss, unless the testers happen to try the magic candidate combination which triggers the fraud.