Problem solved (with fingers crossed); turned out to be pretty easy, even for a novice like me. After studying the schematics some more, I realized that the same 115V connection to the thermal switch also connected with the ATC relay board (pdf page 104, schematic page 11, CN2 on lower right of board). Not coincidentally this board controlled the two motors for the ATC that had been disabled. I traced the cable from CN2 to the terminal block that tied it with the thermal switch and removed it, then threaded it directly to the transformer secondary connection that I had removed. This bypassed the thermal switch (for the time being) and brought it back to being isolated from the machine ground. Once I completed that, everything initialized finally.

Case closed on this issue. Time to move on to the next part of the project.

Dan