Jon Summers:
Are you hooking into the Tool Settings dialog somehow? If you're not hooked into the dialog's events, then your observation is what I would expect.
I've tried both ways - sort of...
I've attempted to use the DITEM_MESSAGE_ALLCREATED on a dialog item to create the rectangle, as well as the OnPostInstall() function of my tool.
I did not consider using a generic item. I'll look at that.