Thinking forward on this idea, what might be the best type of display to begin with? In other words, TN, IPS, VA, etc. I'm thinking that some variant of VA would be best, at least for text, since a more true black background could be achieved for white on black text.
Obviously the type of light is going to have a big impact on overall display color. Incandescent is going to be very yellow, fluorescent will be whiter than incandescent, and so on. What do you think would be the best type of bulbs to explore? I'm not convinced that led light in itself is completely the problem, but it should be very educational to try some other types of light sources to see how they affect eye strain. I think that backlighting in general is a problem and that it is further pronounced by w-led backlighting, having strong bands in the blue and violet spectrums.
Also, would any negative effects of dithering be defeated by running the display with color saturation turned all the way down for providing monochrome only? If so, this could at least be an option for working with text.
Some other ideas that might be worth exploring: Powering the backlight source via DC for zero modulation/flicker; Using multiple bulbs for less hotspotting; implementing color gels for changing color temperature.