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Since consensus seems to elude the discussion here, I've made a bit of effort to distill the analysis.

If you don't want to spoil it, don't follow the link.

http://daniellefong.com/2008/02/10/blue-eyed-islanders-now-i...

I agree with you that the original wording should have rigorously ensured common knowledge among the islanders of their logicality and devoutness, since common knowledge (of a different fact) is what the puzzle is about. But that's a subtle point and not the source of the previous disagreements here.

I don't know about should have. The subtle ambiguity in the wording is what makes this version of the problem interesting.

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