Lateral knee pain, help please

Please help!

I have lateral knee pain since 8 months (July 09). I first spotted this pain while doing front sqauts and neglected it. Pain aggravated and I stopped working out since November. It dint get any better till Jan 2010. Now I started doing some stretches, rehab and looks like its getting better but not sure.

where pain: left leg lateral side (1.5 to 2 inches left to the patella) of knee.

when pain: extension of the knee (exactly from last 15 deg to full extension i see pain), while going down stairs, while going upstairs, lunge (when the affected knee is back side), full weight bearing on the left leg and 15-30 deg flexion,

medical: MRI done and it shows everything fine except for "mild synovial effusion" (no tears no ligament injuries nothing)

I met ortho's, physiotherapits and also got ART done

ortho's says: chondramalcia patella or patellofemoral syndrome
Physio's says: IT band tightness

I am really confused. I got IT band, lateral retinaculum, stretched with ART . I also do quad and hamstring stretches. Now I added glute strengthing, vmo strengthing excercises too. But I still see that pain. It got subsided but not gone fully.

any help is greatly appreciated. Thanks in advance

Additional Comment I forgot:

Couple of points I forgot to mention in my first post

1) I even started using custom orthotics

2)i heard patello femoral syndrome causes knee pain anteriorly not lateral and also people suffering from pfps will see signs of pain when knee is fully flexed and movie goers knee pain.but in my case i dont have any of those symptoms.