I removed the setting in the overide directory. Still no effect. I also made changes to the site.ini.append.php file in siteaccess for mysite to reflect the caching changes. I still can't get the new skin to show up.
You can also see now the skin shows up for a second and then the default skin takes over.
This is a very long overdue answer and I'm sure you have fixed this, but if someone else out there has these issues I thought I should share my possible solution (yeah, I'm being intentionally vague here:)
Clear the template cache in the "setup" tab, or if that doesn't help, try clear all chaches. This worked for me.
When I tried to clear all caches the first time, some of my "ini settings" dissapeared. The second time nothing unusual happened. Just a warning.
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