I understand that there is a text (perhaps Talmud or Talmudic legends) in which we are told that after Yom Kippur Hashem comes down to the Holy of Holies and asks forgiveness of the people of Israel. I have not been able to track it down but am quite eager to see it. Do you know if it and where I can find it? If so, could you provide the source (or the text)? Are there other places in which Hashem asks for forgiveness? Thank you.

I have not found the text you refer to. In the context of your question, however, it is important to emphasize that G-d is both omnipotent and omniscient. True, this raises the problem of the existence of Evil- but the sages have dealt with this issue at length rather than deny either G-d's omnipotence or omniscience. The talmud Hullin 60b teaches that G-d commands Israel to bring a sin-offering on the new month to atone for G-d's diminishing the moon. This too is explained- by the Maharal for example in Beer Hagolah- in light of G-d's omniscience and omnipotence.