[dcb]

FYI, prebuilt hardware 1.3 uses an npn, as does the latest CPP. You might have a PNP driving the backlight, in which case you have to invert the signal, i.e. subtract all the values in this line from 255

byte brightness[] = { 0, 41, 84, 128 }; //middle button cycles through these brightness settings

becomes
byte brightness[] = { 255, 214, 171, 128 }; //middle button cycles through these brightness settings

maybe..

If this it what is going on it will be obvious if when you press the middle button, the display gets dimmer several times before resetting to the brighter setting. When it "sleeps", it sets the display to the first value which might be "extremely bright" in your case (the pwm of 0 means the control pin is constantly at ground, which activates the pnp transistor, but disables the npn transistor in newer versions.)