You do lose some juice on 301's so obviously the best course is to contact sites that house the link and ask them to change it to the new URL (once the new URL is live, and you would still 301 redirect).  This isnt always easy to do particularly when there are 1000's of backlinks, so it really depends on how feasible an option that is, and how many backlinks you have (are there only 3? then having an optimized URL will probably be more beneficial than leaving the URL unoptimized, even if you cant have the links changed).

As to 'exactly' how much do you lose? I dont think anyone has a definitive answer. But I have worked with websites that 301 redirect almost every page when they migrate to a new platform and the SEO impact is not severe if done properly.

I still recommend mining your backlinks and having their targets chaged (at least for the more authoratative ones).

This is a tough one. The worst thing to do is to start with citations and then find out they arent working, and then fix the issue and start all over again (now having two NAPs floating around.

Some businesses use virtual offices in an attempt to rank in different cities or areas. If this is the case with your client, it never hurts to contact that service and explain that you must have a unique suite number. Ive found in some cases they will be quite accommodating.

As for the effects - Ive performed local optimization for clients in this scenario and it still worked fine (and the other businesses using the same virtual office also were in the maps for their keywords), but with constant changes in Local, its risky (in my opinion) to continue without getting a unique address first.

Just my 2 cents!

From a strict A/B standpoint where the two variables are:

www.domain.com/california

www.domain.com/state/california

You will see no discernible difference in SEO results. That being said, if you plan to expand the URLs later, i.e.

www.domain.com/state/california/santa-monica/our-service-keywords.* then you should probably consider what length they will be and factor that into your decision.