I only have three responses to your response. In order,

You write, "My background is in Language and Literature with a big dose of linguistics".

Given your politics, I figured. ;-)

You write, Why would the census choose to mark as WHITE people who define themselves as OTHER and HISPANIC?

Because the census and those that define its terms, are idiots.

And why would a "hispanic" choose to use the term if not to become that new other "white"?

As a linguist, do you honestly think that people choose to pick terms based on how some census defines them? You know very well that people don't choose (atleast not consciously) how words are going to evolve, they just do. And it is clear to me that the word Hispanic, especially as to how it is used by raza (the best politically neutral word, IMO) in the United States, has evolved to have a very different definition than how you define it. Which is a process that I am trying to encourage, by using the term myself. :-)