I see the predicament. Nasty job to generalize that problem 🙂
Strtolower solves 100% of issues.
Here is another widget, this one displays the popular tags in your forum. You can set how many tags to display in the widgets ACP.
Nice, How about a 3D tag cloud plugin?
(click on Create Sphere 3D)
Both suitable for different niches. Though I love second one, I will be choosing first as it is more suitable in my kind of forum.