Internal Dialogue and Italics Usage

I'm working with a new critique group and, of course, we are getting used to one another's styles, etc. The question of using italics for showing a character's thoughts has popped up.

I liked this article by Marg McAlister. Her Writing4Success.com site is the new-to-me blog of the week. You can easily find something on any writing topic. 

In my own writing sample, see if you can tell which are Karlinah's thoughts (without italics or 'she thought' tags):
She was proud of them for this noble deed and yet the question remained in her heart: Who, if any of these men, would have to die to honor their covenant? Karlinah knew that this covenant would be repeated in all seven of the cities of believers. Of a surety the Lamanites would come against them--their preparations promised this. Would they come to the land of Ishmael? How much longer could they stay here and not be in danger? Would death extend to women and children? Her bottom lip disappeared into her mouth.

Was it clear to you? If you answered "yes", then there is no need for me to clutter the text with italics. Her thoughts flowed smoothly alongside the narrative. If you answered "no", let's put that visual clue in and see if you like it better.
She was proud of them for this noble deed and yet the question remained in her heart, Who, if any of these men, would have to die to honor their covenant? Karlinah knew that this covenant would be repeated in all seven of the cities of believers. Of a surety the Lamanites would come against them--their preparations promised this. Would they come to the land of Ishmael? How much longer could they stay here and not be in danger? Would death extend to women and children? Her bottom lip disappeared into her mouth.

To many, italics can be distracting if emphasis in not needed--especially if there is a lot of internal dialogue. Marg McAlister says, "The single most effective way to show what your characters are thinking is to blend their thoughts into the narrative flow. Instead of moving into the present tense, stay in the past tense." I think I got the blending part down, but staying in the past tense is tricky in this case because my character is thinking of the future in a conditional tense. 

Another article stated that internal monologue should be stated in present tense because we usually think in the present. McAlister includes an example in present tense in her article. Would you do anything different in the above example? It can get confusing. I guess the main thing is to make it smooth and understood. Thank goodness for editors.