Screen flash disabled but happens anyway

In a similar situation, I was about to give up and reboot, but then I found that restarting the audio daemon resolves the issue:

sudo killall coreaudiod

The symptom was: in the "Sound Effects" system setting panel, selecting alert sounds didn't do anything (usually it triggers a preview of the selected effect). My guess is that OS X fails to play an alert sound, and falls back to the visual cue.

in case your problem still persists: I could solve it by opening the universal access plist file you mentioned in your post with xcode and deleting the flashScreen entry. after a reboot it behaved as it should. If you don't have xcode installed maybe deleting the plist file may help.

cheers, quam