The controller and all of the lights are plugged into various sockets in the same room (its my kitchen so not very big).

I dont think there should be any ground loop issues. I use opto isolators with each triac. The controller outputs about 5V into a wire that is about 3M long. That wire connectes through a diode and a resistor to the opto which then controls the triac.

I dont get any false firing. When the controller says the lights are off then they stay off. If it turns them completely on then they stay on. I only see the problem when PWM is enabled. I even tried programming the PIC to set the state of the outputs to match the zero crossing and put the code in a tight loop. In this case i would expect all of the lights to be permenantly on (maybe very slightly dimmed) but they still flicker or dont turn on at all.

Each output also has an LED. The LEDs are powered from the same transformer as the PIC and they appear to fade correctly