These problems with not bringing up source for a break point seemed to be solved by deleting the debug configuration then recreating it. So from the IDE tools->debug... then select the projects debug configuration and hit delete. Recreate it again and things seem to work again.
Another interesting note is that in order to debug code that is in a linked in separately built library we had to create a dummy project containing the source code. To do this we created an Advanced C++ Project added in all of the lib source code and then also put the source code path in the debugger path. Both of these actions are needed. If I did not put the source path in the debugger I could set a breakpoint in the editor (the little circle breakpoint icon would show up) but it would not stop. When set up correctly the breakpoint circle icon appears to gain a small wooden stake growing out of it. Only then will the breakpoint actually stop the processor.
Note also, that after adding these projects you may have to close the IDE then reenter to get the breakpoints to work.
There was still another case of a properly setup system not stopping at breakpoints. I've not seen enough data to determine yet if the delete/recreate step was enough to snuff that out. Time will tell...
Dan