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The references to too much charcoal are referring to how much charcoal you have burning, not how much you have in the basket. The kk's are so well insulated and efficient that you require very little burning to get to lose and slow temps. It's tempting to start a big fire and get to temp quickly but you really need to light just a few pieces of charcoal and bring the temp up slowly. Having a full basket is just insurance that you don't run out of charcoal mid-cook; it doesn't go to waste since you can easily kill the fire at the end of a cook by closing all the vents and then reuse it for your next cook. The basket splitter is useful for making it easy to switch the type of charcoal between cooks and to create direct and indirect cooking zones. If you have too much charcoal burning, your temp controller is most likely smothering it to keep the temps down, so when you open the lid the sudden in-rush of air fuels all of that smothered charcoal and let's it flare up, causing the temperature spike - it's the back draft affect. Regarding a deflector, if you only have a little charcoal burning, you rarely need a deflector in a kk; I only use one if I'm using a drip pan to catch drippings for aus jous or gravy.

One of our "cardinal rules" here in KK land is "Don't chase the temperature." Folks think they have to keep making adjustments in their vents to hit a target temperature. One of the basics of BBQ is that a precise temperature is not required - there's no "magic" temperature for perfect BBQ. Rule of thumb is +/- 50F of what you're aiming for is "close enough for government work." I think @Syzygies was on to something about the size of your initial fire. You said, "When opening the lid temps want to take off." That's counterintuitive to my experience and the old BBQ saying of "If you're looking, you're not cooking." as opening the lid lets out heat. The short infusion of fresh air from opening the lid (unless you keep it open for a while) shouldn't cause a spike in your temperature. One check on this is to see how much charcoal you've burned through on a short cook, like ribs. If you've burned through most of the basket, you probably had too big a fire to start with. A chimney full of lit charcoal is way too much fire for a low & slow cook in a KK. Another variable is what charcoal are you using? You didn't say in your post. Most quality lump hardwood charcoal burns fairly slowly and evenly. Some of the cheaper stuff (i.e., Cowboy) which is made from scraps, burns up in a flash and very hot. Give Fogo or Jealous Devil a try. Many of us here on the Forum use those charcoals with good results. Keep us posted on your experiences and we'll see if we can get you on the right track.