I dont remember exactly which optos im using. They have been in the lights since last year. I think they are MOC3020 or MOC3020X.

You are right about it being a low voltage problem. The 1K resistors are fine. Ive used those in every mains PWM circuit ive made and they work fine. The resistors are also in the lights along with the diodes, optos and triacs. The problem is that for some reason i have more 1K resistors in the controller. I just tried shorting them out and the lights stopped flickering and started fading correctly.

Ive been on and off this circuit for over a month now and it turns out to be something as simple as that :P

Thanks a lot for helping me solve this!