I have a GridView inside of a UpdatePanel. In a template field is a button I use for marking items. Functionally, this works fine, but the button always triggers a full page
MSDN specifies that the UpdatePanel.ChildrenAsTriggers property "[g]ets or sets a value that indicates whether postbacks from immediate child controls of an UpdatePanel control update the panel's content" (see http://msdn.microsoft.com/en-us/library/system.web.ui.updatepanel.childrenastriggers.aspx).
Since your LinkButton does not appear to be an "immediate child control," then I would recommend configuring your LinkButton as an explicit AsyncPostBackTrigger.
Below your tag, try adding this: