Casey,
You're trying to rationalize what was said in the conversation prior to the gunfight with what occurred (or did not occur) during the preliminary hearing to reach the position you favor - that Fallehy either misheard what was said or was wrong about what he heard. The fundamental problem is that we have two statements from two different men about the same conversation and these statements are not mutually exclusive. In other words, it's entirely possible that both men heard what they said they heard during the same conversation.
Now, you state the following to support your position:
"1 Behan managed to forget the most volatile comment of the day. Either that, or he purposely ignored it, which seems ridiculous."
What we know is that Behan himself testified that he did not "remember" what Virgil said in response to his insistence that it was Virgil's duty as a peace officer to disarm them rather than encourage a fight. Did Behan truly not remember what Virgil's response was or was it a case of selective memory loss? I don't know. However, the fact that Behan said he didn't remember what was said by Virgil opens the door to the real possibility that what Fallehy said he heard actually could have been said. Indeed, the words seemed to fit in nicely for a response by Virgil.
The remainder of your points discussed in No. 2-5 relating to Fallehy not being called as a witness do not prove that the words were not said either. However, I do agree that because Fallehy was not called as a witness, it does allow for some speculation as to why he was not. Yet, there are too many potential variables for why he was not call to the stand to be certain of anything. Perhaps, Fallehy left town, or felt threatened by the Earps after his statement and decided to change his statement on what he heard, or he simply refused to cooperate with the prosecution and the prosecution didn't want to put him on the stand.
Now, I would agree that the prosecution should have wanted to introduce the "kill them on sight" testimony at the hearing but they did not. Therefore, it's reasonable to believe they had a reason for not calling Fallehy as a witness. Nonetheless, since we can't be sure what that reasoning may have been, we can't simply conclude that the "kill them on sight" language must not have been said by Virgil.
The one thing we can be sure of, whether Behan simply didn't remember a portion of the conversation or decided to have selective memory loss, is that Behan did not alter his position to add the words "kill them on sight" to what he testified he heard from Virgil. Considering Behan is often portrayed by some writers and researchers as strongly anti-Earp, wanting to convict them, and even accused of lying at the hearing in an attempt to have the Earps and Holliday bound over on the murder charges, the fact that he did not remember the words "kill them on sight" or adopt the words in his testimony may actually show that he was not so anti-Earp after all prior to the gunfight and during the hearing.