Out of curiosity:
1) do you have an Auto button in the middle of the climate controls?
2) is your '97 a "40th Anniversary Edition"?
I think I've read that the 40th Anniv Edition uses the same climate setup as the LX450. I'm curious to know if the non-auto climate setups started activating AC...
My first guess would be that the other, "flow-through" button is stuck down. I'd probably pull the climate control unit and clean it thoroughly. If that didn't fix it, I'd start probing the wires to see what signals are actually being sent from the climate controls.