Found a solution to my problem:

http://line6.com/community/message/88108#88108

The idea to re-install Pod Farm was good, but not because I had the wrong version of Pod Farm or the Pod Farm plug in.

Rather, the current Pod Farm installer ALSO contains drivers for the PodXT and several other devices.  Those drivers are actually OLDER than the current, standalone drivers you can download.

BUT, I was desperate, and after re-installing the current versions of the software and drivers, I took a gamble and installed those older PodXT drivers from the Pod Farm installer and viola!  The PodXT is working as a dongle/the Pod Farm Plug In is now working, in Cubase.

You know whats really funny:  I actually had a similar problem and solution before and forgot about the need to AVOID the current PodXT drivers!  I found this on a separate machine, with a different DAW, DI input, etc.  And I guess in my mind that was an anomoly.

But the truth is, that was the solution on my main rig, as well.  Doh!  Only took me a week to figure it out.

Is there a plan to release new drivers that don't have this problem?  Near as I can tell, the only difference between the two driver versions I am using is a fix for the UX2 device.... so I'm not missing much.  But who knows whether later there might be something more significant, like when PodFarm standalone is revised to work with a PodXT as a dongle (for example).