Well, I'm not sure what's going on here. Another user in this thread said they deleted Compressor and FCPX and reinstalled them, to no avail. So, I just assumed that wouldn't work on my end either. But for giggles, I decided to trash them anyway and try reinstalling before backing up my systems and re-installing Lion on all of my machines (my workaround with FCPX is okay for hour long videos, not two hour long videos... the native bit rates are too high and produce image files too big for DVD's or BR's... so I needed the functionality of Compressor again).
After deleting then re-installing the programs, they both work fine now. Compressor is again humming and producing as many disk images as I need, SD or BR images.
So, there you have it. At least for me, reinstalling the programs after deleting them worked.
I used an app called 'App Cleaner' for the uninstall. Perhaps this is what's needed to make sure you get every single last little file associated with the programs to truly do a clean install (vs. dragging and dropping the program to the trash).
Another user in this thread said they deleted Compressor and FCPX and reinstalled them, to no avail. So, I just assumed that wouldn't work on my end either.
That's great. It's a reminder that issues are often related to factors that are specific to a given system configuration, the other installed software, codecs and so forth. Why there are not always one-size-fits-all solutions.