I'm posting my findings and my solution (hack) to this issue with the hope that someone else finds it useful. I had professional AV guys (from a very highly rated local AV installation company) here 3 hours today and they were stumped, so I feel vindicated.
After reading this and other forums I had a hunch that my IR interference problems were possibly being caused by my Panasonic plasma TV (c. 2007 vintage) emitting an inordinate amount of IR radiation that was reaching into my media closet. I tested this theory and sure enough, when I turned the TV off, the IR repeater communicated perfectly with the components in the closet. However, turns out the excess IR was actually interfering with the Russound receiver on top of my TV which sent signals to the closet continuously. The receiver's blue light that indicated signal reception was on almost continuously indicating it was constantly receiving IR signals. (I didn't realize this was not a normal state since this is my first IR repeater).
The AV guys essentially shrugged their shoulders, all but telling me that I needed a new TV. I looked into IR alternatives and I almost pulled the trigger on an RF unit.
Refusing to give in, I stumbled upon a post on another forum where a similar problem with a Panasonic plasma was reported. (Supposedly some Samsung sets have the same issue.) A reply to the post suggested turning down the brightness on the TV. I tried this and it actually worked -- when the picture was almost black! Then a solution occurred to me that I've seen around this place -- the good old masking tape / Post-It note solution! I took my small, bright yellow Post-It notes -- exactly the same width as the IR receiv
er, and layered them one by one over the front of the receiver. After note 3 I could see around the edge into the unit that the blue light indeed was off. I held my breath, picked up the remote, pressed a button, and BINGO! Everything's responding! The remote beams through the notes!
I've attached a photo of my "solution". I'm still annoyed that I paid so much for this deal. I don't find yellow Post-Its on top of my TV particularly attractive. I may go ahead and try an RF unit or maybe even start over with a new TV. But at least it works, as inelegant as it looks. I do intend to try some less noticeable post-it colors or perhaps a semi-opaque tape. But there it is. I hope someone else sees this and can use the information. It has been a time waste and a beating of a problem.