With that 3rd option in mind -- how will you deal with moves that magically sleep, or polymorph? What about moves that hypnotize or dominate? Stun isn't the only thing that can neutralize a character for a round or more.
Well, I'd have to take each of those on a case by case basis. The Sleep spell (Wizard level 1), for example, starts off as a Slowed condition followed up by Unconsciousness on the first failed save. This is, in my opinion, a bit overpowered as it allows coup de gras to occur after the opponent (which could potentially be mulitple opponents!) goes Unconscious. If I were an evil DM (I am), I could use this to wipe out most of a party. I might house rule this to be Dazed on the 1st failed save, Stunned on the 2nd failed save and then Unconscious on the 3rd failed save, if someone is that unlucky. Dominate is not as much of a concern, because the player is still active, carrying out the action that I dictate, which is usually to attack one of their companions (and is usually funny for all involved).
I just don't see how this makes sense -- they take actions but with big minuses? If I use a fascination illusion on you, your character shouldn't want to do anything else but continue to stare at my lightshow.
Maybe your problem isn't stun or daze, but how many mobs you're putting in each encounter, and how fast everyone's turn is going? Losing a turn only becomes awful when a single turn takes fifteen minutes. I revoke people's turns if they take too long. It's harsh, but their indecision negatively affects everyone at the table. I also usually only have 5 enemies on the board. Any dudes over that are minions.
Again, I'd have to look at the powers and see if they violate my "unfun" guidelines (player inaction = unfun, BBEG ineffectiveneses = unfun). Not sure what fascination illusion you are referencing, but I would imagine that it could have a variety of effects besides stunning that would becaused by pretty lights dazzling the characters. Blindness, Slowed, Dazed, Immobile, are just some that come to mind. The big minuses represents the character being distracted, unfocused, and not as effective as when they are not under the influence of the condition.
Speed of turns can be an issue sometimes, but even if a turn just takes 15 minutes to cycle through, it could potentially be 30 minutes or more before a player saves a Stunned condition. Out of a 4-5 hour monthly game, that's valuable play time they are left out of.
I also think if your players only care about taking their own actions, that sucks, man. That sounds real boring to me.
They don't "only" care about their own actions, but they are certainly looking out for their character's best interests, and I don't fault them for that. They don't want to nerf themselves any more than I want to nerf them. In addition, I want to ensure that the opponents that I carefully select to challenge them don't become a joke when they Mark, Divine Challenge, Stun, Weaken, and Immobilize and then proceed to beat them down to 0 hp without receiving a scratch in return. That certainly doesn't convey the awe or fear a BBEG should invoke. I believe that there's an Orcus thread around here that illustrates this point nicely. That's why I want to implement a change the rules that affect everyone, not just the players or opponents.
Also, keep in mind, this isn't something that I'm noticing on my own. The issue was brought up at Gen Con to the WotC panel and the panelists agreed that Daze and Stun can be problematic. They stated that they were consciously trying to limit the monsters they are developing with powers that inflict these conditions and they briefly talked about their own ways of dealing with this. One of them said he gave his monsters an ability to make a save against the condition. Another guy said he downgrades Stuns to Dazes. So it's not that I'm making this up, others are noticing the unfun these two conditions can cause. I'm just trying to find a way to deal with it without screwing my players or myself.
If anyone has better ideas, I'd love to see them.