Hi 3v0,
How about this?
<> Tie the Latch/Strobe/RCK pin (12) and the Output Enable pin (13) together (driven by your "latch" signal).
<> Loose the resistor between the '595 QH output and the D7 pin on the LCD.
<> Put a pull-up resistor on the LCD RW pin so that it's a '1' (read mode) when the '595 outputs are tri-stated.
<> Put a pull-down resistor on the LCD RS pin so that it's a '0' (command mode) when the '595 outputs are tri-stated.
Here's what I suspect would be the LCD write procedure;
(1) The "Latch" signal is normally hi ('595 outputs off).
(2) Clock 8 bits into the '595 shift register.
(3) Set "Latch" signal lo ('595 outputs on).
(4) Toggle the 'E' line to send command or data.
(5) Set "latch" signal hi ('595 outputs off, RW = 1, RS = 0)
(6) change your CLK pin to an input
(7) Set the 'E' line hi, LCD outputs status byte
(8) Read D7 status on CLK pin
(9) Set the 'E' line lo, TRIS CLK back to an output
This means your "Latch" signal is normally hi and the '595 outputs are tri-stated between LCD write operations.
Mike McLaren
<added>
Just realized the procedure would be slightly different using LCD 4-bit mode but hopefully you get the idea...