[Sherman Logan]

The oldest settlement on the land that is now İstanbul was, however, Greek.

Very unlikely. More accurately, "the oldest known settlement."

[Verginius Rufus]

The name Byzantion is said to be of Thracian origin. There could have been a Thracian settlement there before the Greeks arrived, and others before the Thracians (Thracian was an Indo-European language so there could have been an earlier non-Indo-European population in the area in Neolithic times or the Early Bronze Age).

I found the passage about the Chalcedonians being blind--it's in Herodotus, not surprisingly. It was said by the Persian commander Megabazus (4.144):

This Megabazus left an immortal memorial of himself among the Hellespontines by an expression he used. When he was in Byzantium, he learned that the Chalcedonians had founded their city seventeen years before the Byzantines had founded theirs. "The Chalcedonians must have been blind at the time," he said, "for they certainly would not have chosen a worse site than a better when they had the option--unless they were blind." (Trans. David Grene)