This one took another bug hunt, 3 hours this time:
Cascading LOV's in an Interactive Grid can also give this error, when the user changes the value of the Parent Column on the page.
The query for the Child Column, which will have :PARENT_COLUMN in the where clause, will fail with: ERR-1002 - unable to find item ID for item "PARENT_COLUMN" in application "999".
Note that this error is (again) NOT shown on the page, only in the console and the debug views.
In my case this had nothing to do with the 2 parent/child column definitions or with the LOV queries.
The cause turned out to be the column that I had used as the Primary Key. In the query of the IG this column was always null.
Since all the rows I needed to edit were empty anyway this seemed logical enough; the primary key would be filled by a trigger later.
But this was the cause for the ERR-1002 error.
So choosing a Primary Key column that was not null solved the problem.