Got it after a number of days searching: 

    (function ($) {
        Drupal.behaviors.hotTopicsResearch = {
            attach: function(context, settings) {
                
                $(document).bind('drupalOverlayBeforeLoad', function(event) {
                    $('#simple-dialog-container', context).dialog('close');
                });
            },
            weight: 11
        }
    
    })(jQuery);

The other events seem to have the wrong order. 'drupalOverlayOpen' almost works except that the editing overlay never 'becomes active'. This is why I was trying to work on the target editing screen events rather than the open dialog. 

overlay_paths without there being'use case documentation' it looks like it only applies to menu items. http://drupal.stackexchange.com/questions/8220/how-to-manually-use-drupal-7s-admin-overlay/8265#8265 shows you how to add content nodes to the admin paths. This displayed my node in the admin overlay, but without the background context being visible - defeating the point - and with some further quirks.