First - My compliments on such a well written question. 

I don't do OR, so I had to look at the OR K-1. It seems that there was a state tax refund, which was included in income on the federal return. If the Federal K-1 showed the other income on some line, then use that same line to input the State if different.

Does Oregon normally make an adjustment for state tax refund on the 40? Do you do something with the smaller OR number or just the difference in the two? I don't know. As far as input goes, I would just adjust line 1 for State (if different) in the right hand column.   In other words, make it work.