I agree, those colors on the test kits are too close. Why they can't make the first one red, the next one green . . . *shrugs*
I really couldn't say for certain about the evaporation affecting the concentration of the ammonia. It would seem pretty logical that the less water there is, the higher the concentration though, wouldn't it? Hmm. Hopefully someone who knows will come and answer that question. Otherwise, I'll ask around for you.
Prime works on ammonia by locking it up and turning it into ammonium, which is a slightly less toxic form of ammonia. I think the ammonia eating bacteria also will eat ammonium but just to be on the safe side, you could get a bottle of something that doesn't work on ammonia. I know API has bottles that just say Tap Water Conditioner that basically only remove chlorine and chloramine. Maybe a small bottle of that will help. I'm going to go back through my fish book and re-read what it says about fishless cycling so I'll let you know what I find out. :)
Okay. I think, after reading, that the high ammonia levels you're seeing still are normal for fishless cycling. The difference between fishless and fish-in cycling is with fish-in, you have to do frequent water changes to bring the levels down into a safe range for the fish but not so low that there is no ammonia left for the cycle. When you cycle fishless, you don't have to worry about safe levels. You pour some in (the book says about a capful) and wait for the levels to drop. From what I'm understanding, this process can take several weeks so I guess you're right on track. The only part I don't understand is why there are nitrates already. What kind of test kit are you using, a liquid one or strips? If it's liquid, be sure to really shake the second solution bottle. I mean shake it until your arm is going to fall off. That's the key to an accurate reading. Also double-check the expiration dates. I bought a bottle of test strips once that didn't work because they had expired long before I bought them.
You can check this thread out to see if it has any helpful information. http://www.bettafish.com/showthread.php?t=47838