After speaking at length with Verizon, who ended up transferring me to an HTC support guy, I had to hard reset it. Appears this is a common problem for other Imagio users. I did find some sites that offered solutions (allegedly) but I just said screw it and reset it.
If anyone else has this issue you can google: text indicator issue imagio.
I still love the phone, but this slight glitch is kind of annoying.
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