Hmmn, so after loading the game this morning, I was able to get the conversation option for the Dozens to work for me, depsite still being a hero with the Knights. Still couldn't go with the Knights, but its not really a big deal which faction you choose apparently. You can still say whatever you want in the animancy hearings and it doesn't appear to affect your reputation with either. Not sure why the conversation option suddenly became usable with the Dozens though.