Whew, this was a tricky one! Here's my solution, at 150 characters:

sub flames {
  $N="@_";(@F,$_,$l)=@f;for$l(@l){$_.=$N=~s/$l//gi+0
  }$n=$N=~s/[a-z]//gi;s/.(?=(.))/$&+$1/ge,chop while
  $_>100;splice@F,$l=($l+$n-1)%@F,1 while$#F;$_+0,@F
}
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We came up with exactly the same approach to counting off the letters in FLAMES.

I included a +0 near the end of the sub, so that it will return '1' instead of '00001', for example.

P.S. larryk, I'm very sorry things didn't work out for you and Buffy. Don't worry, I'm sure the right woman for you is out there somewhere!