Some ideas from the discussion on invisibility vs perception.
First, remove the +20 bonus to stealth for being invisible from the perception skill.
Second, change invisibility to granting 100% concealment.
Third, change total concealment to
Creatures with 100% concealment are effectively invisible. An invisible creature gains a +2 bonus on attack rolls against sighted opponents, and ignores its opponents' Dexterity bonuses to AC (if any). Perception checks relying solely on vision automatically fail against anything that has total concealment. Total concealment gives a +10 bonus to stealth vs perception opposed checks.
Fourth, Rewrite the blinded condition.
Blinded
The creature cannot see. It takes a –2 penalty to Armor Class. All opponents are considered to have total concealment against the blinded character. Blind creatures must make a DC 10 Acrobatics skill check to move faster than half speed. Creatures that fail this check fall prone. Characters who remain blinded for a long time grow accustomed to these drawbacks and can overcome some of them.
Finally, add a blurb to spells like displacement that basically states that the spell gives total concealment, but does not cause visual checks to automatically fail and does not grant the +10 bonus to opposed perception checks.
TLDR - I essentially moved the penalties and bonuses around to make their effects a little more consistent.