Got it. My local build was missing one change that was in CVS, and it was the change that caused it:
2005-05-02 23:18 harekiet
* src/hardware/vga_dac.cpp: Some bizarre vga dac behaviour fixes
star control 2
Reverting this change fixes Wari but presumably breaks Star Control 2. Not good. The change looks really odd, I don't believe the hardware is supposed to work this way. I will have to dig out my copy of SC2 and check what's going on.
EDIT: Found the original thread: Star Control 2 palette problem
The change itself is three lines. The first line (in write_p3c7) makes sense in the connection to that described undocumented behavior, as odd as it is. The other two lines are less clear (moving read_index in write_p3c9 and write_index in read_p3c9). Removing them fixes Wari. I would not be surprised if only the first line is actually needed for SC2.