Add back local storage patch

And fix the workspace bug.  It is caused by an issue with how some
global variables are being used asynchronously and is exacerbated by the
delay reading settings from the remote introduces.

1. The workspace is created and is marked as not initialized.
2. The configuration's change handler is triggered, and now
   initialization is complete.
3. The handler tries to set the global workspace variable to initialized
   but the workspace has not been set yet so we get an undefined error.
4. The workspace global is now set, but it is set to the old value with
   initialized still set to false.
5. Workspace is never marked as initialized until something else
   triggers the on change handler again.

Fixes #3061, and closes #6546.

My guess is this logic changed in one of the VS Code updates,
introducing this async bug but never getting caught probably because for
them the settings are always local thus minimal delay.