{F93536}

That screenshot is probably on the heavy end (I have a pile of custom fields on my local install) but seems pretty reasonable to me, at least as a first step.

Particularly, this:

• groups transactions based on a similar heuristic to the old one (group if the same user took several actions in a short period of time, from the same source, without posting multiple comments and with no intervening activity by other users);
• sorts transactions within a group so more important transactions appear first;
• transactions are then sorted by icon vs no icon, so it's "all transactions with an icon, in descending priority order" followed by those without, in descending priority order;
• the first transaction dictates the color (this should be the most important transaction with an icon);
• if a transaction is "comment", and there are other transactions in the group, we hide the "commented on" text and icon.

Can we just use the edit pencil as default action taken (since, likely, you editing something).

This one's maybe a touch funky with that, but this is a relatively extreme example.

{F93540}

I can clean that up after, Timeline needs some love in general.

Yeah -- I think that's a worst-case scenario, and it's really not bad.