Earl,
Indwelling sin is something that is commonly discussed among the Reformed and in our Confession:
CHAPTER XIII.
Of Sanctification.
I. They who are effectually called and regenerated, having a new heart and a new spirit created in them, are further sanctified, really and personally, through the virtue of Christ's death and resurrection, by his Word and Spirit dwelling in them; the dominion of the whole body of sin is destroyed, and the several lusts thereof are more and more weakened and mortified, and they more and more quickened and strengthened, in all saving graces, to the practice of true holiness, without which no man shall see the Lord.
II. This sanctification is throughout in the whole man, yet imperfect in this life: there abideth still some remnants of corruption in every part, whence ariseth a continual and irreconcilable war, the flesh lusting against the Spirit, and the Spirit against the flesh.
III. In which war, although the remaining corruption for a time may much prevail, yet, through the continual supply of strength from the sanctifying Spirit of Christ, the regenerate part doth overcome: and so the saints grow in grace, perfecting holiness in the fear of God.
There is a war within us where the flesh lusts against the Spirit but we do grow in grace.
I think one of the common pitfalls we fall in to is to treat grace as the RCC does - as some sort of substance that is poured in or out of us. Grace, in a sense, is being put in contact with the living Christ by the power of the Spirit. I don't think it is helpful, as some have stated here, that we never resist the work of the Holy Spirit. Christ is placarded to us in Word and we are oft distracted. Christ is placarded to us in Sacrament and we often do not prepare ourselves to receive Him. We're in a war and we often treat the battle as if we're not a participant in the battle but that, because Christ has already determined the final outcome, that the command to fight
now is somehow some inconsequential play acting. The Reformed have thus always rejected this idea of eternal justification where we live, somehow, in the decree of God in our thinking instead of living by the Word of God.
We understand that the Word of God has sovereignly regenerated us and, even as children have no control over their birth, we have no control over the Sovereign working of the Holy Spirit. We were made alive in Christ by the Gospel that change our volitional nature to abhor our sin and to love Christ. We have, by faith, been united to the living Christ and so we have the sanctifying power of the Spirit through the means of grace to resist temptation, to give daily battle to sin, put sin to death in our members, and to learn to love Christ more. The fact that we need to repent of our sins is a real reality because it is not the Holy Spirit that indewlls us who sinned but the body of death that still hasn't been fully put to death. We know we fail in that battle and Paul makes it plain in Romans 7 how we all hate the things we still see in ourselves so there's no point in even denying the idea that we resist the goodness of God when we choose sin. The call to us is not morbid introspection but to continue to look to Christ for strength, anew, in the battle. We err if we treat the battle as theoretical as if the warnings of Hebrews apply to the "un-elect" as if we can identify those that need those kinds of warnings. Rather, we are called by the Word to give battle daily and to make sure that none of those among us are falling behind.
I'm kind of stream of consciousness here but I'm trying to express the idea that is very common in Reformed thinking. We don't dwell on theoretical ideas of how, exactly, grace is resistable or irresistible in particular categories but focus on what is plainly revealed in the Scriptures: that our union with Christ produces real life and change within us and that we're really called to daily battle and the encouragement of those around us.
