GNM, just want to report the outcome of the problems I was having. I went to IRC #ally per your PM suggestion, and found a person there who got everything straightened out. It wasn't pretty....he ended up going back to stock rom and moving forward from there. It involved several utilities, forcing a key to write to the registry, and more. But I'm back in business running Velocity 1.1 and your 2.2.1 recovery.
Thanks for your efforts and for pointing me in the right direction.