I actually have a different view - but take my advice with a grain of salt. I'm also applying to HKS for Fall 2012 admission so I have no idea whether my views have any truth behind them or not.
I would actually recommend you to cut your essay down to 1000 words or less. While I don't know how much weight the Admissions Committee puts behind word limits, one of the qualities they are looking for in applicants is the ability to write concisely and that means putting your entire life story into 1000 words. Furthermore, I also think that the fewer chances you take the better but that could also depend on the content of your HKS essay. If you don't think you can cut 100 words, I would weigh whether the content of those 100 words is worth the risk of going over the limit. I'm a really risk adverse person so for my application, I'm trying my best to eliminate every opportunity the Admissions Committee has to reject me.
There is always the option of making your essay a PDF and then it won't be so easy to count words exactly...