Update: NTSC GAME WORKS OFF HDD
I deleted what DVD2XBOX put on the HDD and FTPed the game over to HDD (renamed file first), then used Step 7 (outlined earlier) to process ACL on existing files on HDD. Worked like a charm.
I don't understand why DVD2XBOX told me it processed the ACL while copying off the disc, but either it didn't or it didn't do it right. The default.xbe was different on the HDD after DVD2XBox copied it over from disc, so it did something. DVD2XBox, as I mentioned earlier, failed to copy a file, too. I found that in the log and FTPed it over.
All-in-all, I'll rate DVD2XBOX a 10! when it comes to processing ACLs for files already on the HDD and a 0.0 for ripping from disc and processing ACLs on the fly.
Thanks for the help guys. NTSC works just fine when using step 7 and processing the ACL off the existing file.
(Yes, I had process ACL on. Yes, the ACL was in the folder.)