I've read some piece of fiction written in the 1930s, in which it was rendered "okeh" all the way through. I gather there was a theory common then that it was related to a Choctaw word "okeh", so some people - including FDR - insisted on that as a "pure" spelling.
I'd concur with OK or okay. Not being from the states, I tend not to read "OK" as "Oklahoma", and indeed it hadn't really occurred to me that people might. But you wouldn't parse it as that when reading it in text, would you?
"OK, let's all gather round and look at the map."
wouldn't be mentally read as
"Oklahoma, let's all gather round and look at the map."
O.K. looks like it's supposed to stand for something, and feels too spread out on the page.
Agree that OK'd or OK'ing look ugly though. My instinct would be - if you must use OK as a verb - to use "okayed" and "okaying". But then that would make me inconsistent.
Dammit, why does such a useful word in everyday speech have to be so darned difficult to use in writing?