I checked and rechecked properties, preferences, etc. Out of desperation, I made my first breakpoint conditional with the condition set to "1=1" and left it enabled. Absolutely meaningless statment although true. When I relaunched the debugger, the program halted on that breakpoint!? Hitting Resume caused the program to halt at the second breakpoint, which was NOT conditional. All breakpoints appeared to work. I was able to watch variable etc. properly. Out of curiousity, I removed the conditional statement 1=1 from the breakpoint and all the breakpoints continued to work properly. For now, I'm in business.
Go figure? Magic indeed....
If someone can explain this behavior I would love to hear it.