Ah, John Hardly, I'm afraid I have to disagree with your perspective.

'The "separation of church and state" that we have was instated to protect religion from persecution by a "state religion" as well as to keep the government from being corrupted by a religious oligarcy.'
So far, so good.

'To, as a matter of course, be instructing in public schools (paid for and attended by religious and non-religious citizens) that creationism is false is intolerant and is a use of state monies and facilities to persecute religious beliefs.'
No, it's a use of state resources to teach science. Now, if the state insisted on invading the churches and teaching in Sunday Schools things that the churches find objectionable, that could be considered persectution.

'Should the state be allowed to tell a religion that is law-abiding, that it's theology is objectively wrong?'
Of course not, but this isn't the issue. Theology is not an objective matter, and it doesn't belong in public school science curricula. The churches have no more right to insist their theology and beliefs be taught in public schools than anyone (government, schools, etc.) has to insist on taking their agendas into churches.