As for Scarebearz: The DMG is higher too. I have been parsing for a whole night and I do 20 more DPS by using the first rotation. In both rotations there is a GCD and you do have a point that popping a cooldowns during a full MP regened Fire III is useful. However, BLM only has Raging strikes (on the offensive) and that is popped in the beginning of my rotation. It's not worth it too to keep losing potentional damage over the whole fight in because of using some cooldowns. I realise you have potions as well. But for example an X-potion of intelligence can always be used in my rotation after my method:

Thunder II - Fire III - Fire I until 300 MP - Swiftcast Flare - Convert - Fire I - Fire III (proc) - Blizzard III - Thunder II - Fire III - Pop Potion.

Sure, it's not used during a GCD, but I argue that you would still lose more DPS overall if you ignore the 250 damage potentional damage every time.