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Thanks Dave, as always fantastic support from Shirt Pocket. That solved the problem.
It's interesting to note that the disk image I booted from and tried to image is about as clean an install as possible. I used Superduper! to re image the drive with the *original* system install (much faster than pulling out the original disks). After booting up with the new image I applied the snow leopard update, then ran all the recommended updates (including update to 10.6.1). The only other thing I added (besides Superduper!) was two printer drivers! Also, I did run Disk Utility's Repair disk permission function.
What's also interesting is that Superduper! did work a few times before this error (I update images at each successful step of a fresh system install). So it appears that 10.6 did something in the background. Hopefully this is just a one time "quirk" or it can be fixed in a future update. Again, thanks.
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