See if your library can get you a book about quilting in sections, like Divide and Conquer: Quilt it your way by Nancy Smith and Lynda Milligan. They have a technique where you cut the batting into sections (I think they do three) so when you quilt in the center you only have the bulk of the top and backing to deal with on the sides. You put your section of batting in only when you are ready to quilt the area.

As for quilting, I did my lone star by hand and did have the aforementioned "cupping" in the very center portion of the star. I quilted a 1/4" away from every seam so every diamond had a smaller diamond quilted within it. Here is a link to pictures I posted of it. http://www.quiltingboard.com/picture...lt-t22341.html The quilt did quilt flat for me.

I see no reason why you couldn't do the same only do continuous curves in each diamond instead. I think it is more forgiving than SITD. In the big background areas you can do any FMQ design you are comfortable with.

What if instead of fmq, I tacked the points of each diamond with a tiny star....it would secure the stitching at each intersection and allow the batting to puff up and fill the puckered areas?

That would probably work great. But you will also have to do a few of them in the large open spaces of the quilt. Your batting will tell you how close tacks (or ties) need to be. If you go this route then I would go with a high loft batting like Fatt Batt by mountain mist. You can order on line from Walmart and pick up at your local walmart store. this is the batting I have used on tied quilts and it is very lofty and cuddly.