Evil Vs. Free Will

I've been thinking a lot about the problem of free will vs. the problem of evil. Mainly because it's become the center theme of the novel I'm working on right now. The argument, for those not familiar, has been bandied about for centuries. The non-believer in God says, "If God is omniscient (a universally accepted charectaristic of the Judeo/Christian/Islamic God commonly referred to as Jehovah) then I cannot do evil because everything I do is predetermined and pre-known by God." But, "God can't do evil because he is, by definition, good and loving." So how is there evil?
"Free will." Is the answer.
"But how do we have free will if God knows everything? Can you honestly tell me I have a choice if there is anyone anywhere who can guarantee with 100% certainty what I'm going to do? That doesn't sound very free to me."
And so we spin and spin in circles.
Still, there are more people in America who believe in this version of God than don't.
I don't believe in it, but the Gnostic conception of the same God is much more interesting, and I think satisfying. In this version, God isn't actually God. He's a flawed, angry creature who is the manifestation of the smallest bit of the real God. That's why we die. That's why there's sin. We've been worshiping the wrong God all this time. Jehovah created the world of matter to try to recreate his hazy memories of the true realm of God. He's insane and basically evil. He's jealous becuase humans were given the "breath of life" (a soul) by the parent as consolation for being created out of matter and having to go through the trauma of living and dying.
What are the charectaristics of the Gnostic God, a figure referred to in their writings as "The Parent?" It's all about balance and the harmony of opposites. It favors neither opposite but chooses the middle path, all things at rest, calm like a pond. In other words, it's Buddhist.
There have been exactly ZERO wars started by Buddhists. What if the Western conception of God had been Buddhist instead of what it is. Everything would be different. I imagine it would be better but there's no real way to say one way or the other. (The grass is always greener after all, and Buddhist priests are hardly beyond the kind of petty corruption found everywhere in everything.) Of course, the fact that things are the way they are might not be the result of our choices. We could easily be on invisible strings that we can no more fight than the urge to pee. I don't think so, but he'd want me to think that wouldn't he?
I think I'll be done with the novel by June 2004 so I'll probably have more to say on this subject once the story works itself out.