Here is a little additional info I should have included in my initial post:
I repaired disk permissions and came up with three items that are not on Apple's list of "OK to ignore." These are:
• Warning: SUID file "System/Library/Extensions/webdav_fs.kext/Contents/Resources/load_webdav" has been modified and will not be repaired.
• Warning: SUID file "usr/sbin/pppd" has been modified and will not be repaired.
• Warning: SUID file "usr/sbin/vpnd" has been modified and will not be repaired.
I have been looking for some reference to use to understand these messages and if they are relevant to the problem at hand but no luck so far.
One more tidbit:
When I try to run a schedule the system.log shows the following events:
Nov 23 12:52:12 INP11000XXXXX kernel: Limiting closed port RST response from 253 to 250 packets per second
Nov 23 12:52:14 INP11000XXXXX kernel: Limiting closed port RST response from 252 to 250 packets per second
Nov 23 12:52:44: --- last message repeated 4 times ---
Problem solved, though not fully understood. There was something IN the backup folder, perhaps an invisible file, that was not being overwritten when I did a manual backup (shut-down, copy db files to Backups folder with replace, startup again).
I did a "select all" on the folder contents and deleted them. Now scheduled backups run fine!