Folks – I took the simple route and it seemed to work for me…
I turned OFF my current theme (Thematic) and went to the standard basic “Twenty Ten” theme, then did my album addition.
VIOLA – it allowed me to make the changes. Then a simple click of the check-box and my customized theme back in place and things are working again.
OF COURSE this is still a band aid and I am watching the forum to see if there is a more permanent fix!