You sum up the problems here exactly. The implication of the word "she'he" being both genders rather than genderless, indeterminate, or other, if I were talking to someone unfamiliar with the pronoun being used, continues to thwart me. However, for my internal purposes, I can see taking one of the formats already mentioned to personally mean "undesignated gender."

I also have had the feeling that "she'he" might be too long. The ze type pronouns probably are the best it gets. ;)