grav-universe said:
The time dilation is always singular there since it is an invariant for that shell
No, it isn't, because the horizon is not timelike. You evidently don't realize how much of your reasoning is valid only for a timelike surface, or, to put it another way, it's valid only for an *actual* static observer, one that moves on a timelike worldline. The "hypothetical static observer" you keep referring to at the horizon does *not* move on a timelike worldline, so he can't exist, so you can't draw any deductions from his "hypothetical" existence. (This is another way of stating that the horizon is not a "place" the way locations with constant r > 2m are places.)
In the case of time dilation, it is true that there is an invariant involved: it is the contraction of the 4-velocity of a static observer with the 4-momentum of a radial light ray either being emitted or absorbed, which gives the energy of the light ray as measured by the observer. (Strictly speaking, we then have to use quantum mechanics to convert energy to frequency, and frequency to "rate of time flow" for the static observer, but that's a minor technical point for this discussion.)
However, at the horizon, there is no "4-velocity", because the horizon is null, not timelike. The 4-velocity of a static observer is a unit vector that is tangent to his worldline; but there is *no* unit vector that is tangent to a null curve, because a null curve, by definition, has a tangent vector with length zero. So the invariant in question can't even be defined at the horizon.
grav-universe said:
directly applying the co-efficient in the metric for that r, although the straight-forward application of the metric would still apply to the clock of a static observer there, but anyway, I suppose it could only be the dr^2 component that can be made non-singular as in sense #1 since that is coordinate dependent, right? Along with the tangent component though, so both spatial components can be made non-singular, but never the time component, correct? That's interesting. What is a form of the metric (the transformation of co-efficients from SC) that would allow both spatial components to be non-singular?
I think you're making it more difficult for yourself by focusing so much on the metric coefficients. Read again what I wrote above, about why the "time dilation invariant" can't be defined at the horizon. Did I mention anything about metric coefficients? Everything I said was stated in terms of coordinate-free concepts, like whether a particular curve (such as a curve of constant r, theta, phi) is timelike or null.
As far as coordinate charts that are non-singular at the horizon, I think I already listed some, but maybe it wasn't in this thread; there are quite a few on this general topic right now.

However, I should amplify that somewhat, since whether a chart is non-singular depends on what aspect of the chart you're looking at.
The only charts I'm aware of that are *completely* non-singular at the horizon, meaning we can express *any* invariant there in the chart, are the Kruskal and Penrose charts. The key feature of these charts is that, if you look at the line element, not only are none of the coefficients mathematically undefined (i.e., no zeros in the denominator), none of them are *zero* either. That means the inverse metric (what you get if you consider the metric as a matrix and invert it) is also well-defined. (Btw, this includes the "time component", so it's not true that there are no charts where the "time component" is completely non-singular.)
The Painleve chart and the Eddington-Finkelstein chart have non-singular line elements at the horizon, but they do have a coefficient that's zero there (the coefficient of dt^2), so the inverse metric is not well-defined. (These charts have the same issue with the "time component" that the SC chart does at the horizon.)