Hello all - just wanted to thank everyone for their thoughtful suggestions and let you know how it turned out...
It was the motherboard.
I wish I could say there was a happy ending (and hopefully there still will be) but not quite yet...
I was very frustrated with researching alternative boards online so I just bit the bullet and headed to CompUSA (only game in town) with the intention of buying whatever they had in stock. I looked over their selection and ultimately settled on an Intel DH67BL
board. No, its not on any HTPC recommended parts lists, but what the heck - I just want a simple MB. This thing won't be triangulating descent trajectories for NASA spacecraft; it just has to play videos!
Got it home. Took apart the HTPC. Installed the new MB and reassembled everything. Moment of truth.......IT WORKS! Booted like a champ.
I installed the new drivers and all continued to be well. Tied up the loose cables, screwed the case back together, connected it to the TV and..........NOTHING. Black screen. "No input detected."
I won't bore you (more than I already have) with the details.
The short of it is that this board has known issues with its HDMI output. I'm not kidding. There are 50+ page threads dating back a year with people harassing intel to resolve this issue. What are the odds??? I fought with it for a few hours before coming to the conclusion that it wasn't worth it. I imagined a scenario where I found some magical working combination of BIOS + video driver + who knows what that actually got an image on my TV. What then? I have an HTPC tediously held together with "bubble gum and duct tape" that may break again the next time microsoft pushes me a security update. Not what I want.
I've decided to return the Intel MB and simply order another of the "recommended" motherboards for HTPCs (not a GIGABYTE though, many seem to be plagued by the 'boot loop' that started all this). There is no way I can get three lemons in a row! Famous last words....