Does it even work when you click the "flat" option at the top of each thread view page?
Also, just to make sure there's no chance of miscommunication: You're clicking on "Edit Profile" at the top to edit your profile, then clicking on "Display Preferences" to go to your display preferences, then setting your "Default Display Mode" to "Flat Mode", then hitting "Submit", right?
Oh, and what's your setting for "Default View"?
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