According to the documentation you can just drag and apparently that works fine for everything except actually using the file in Pages on the mac.
Tried your suggestion and that still doesn't work. This is so weird. Should I email you the document and see if you can do it. It's very short and just a recipe.
Another thing I just tried is to create a new document from the file open dialog and then to save it to the iCloud. All I get is the whirlygig. I had to force quit pages. So I'm guessing it's not just my Cauliflower recipe that is causing the problem.
It turns out it was a corrupt Mobile Documents folder in the library. The genius at the Apple store figured it out after much head scratching. Moved it to the desktop to force a new one to be built in Library and the problem was solved. Apparently, I was lucky enough to be the first guy to hit it. :-) No idea how it happened though.