During further troubleshooting I noticed that when I hit the Snapping or Skimming buttons they would only stay engaged as long as I held the mouse button down, as soon as I let it go it goes back to being off.
Upgraded to OS 10.4.4 and FCPX 10.2.1.
Now I can distort a solid color, BUT it sometimes has a border on it and sometimes when I go away from it and come back it shows the distorted wireframe I adjusted but the color is full-screen. I go to the Video tab to see what's happening and Effects, Transform, Crop and Distort are toggled on. When I shut off crop and/or transform the border and/or full-screen color disappear and everything appears as it should.
Those items' (Effects, Transform, Crop and Distort) parameters are hidden, but when I go to click 'show' it already says 'hide'. It thinks it's showing the parameters when it's not. Clicking on 'hide' acts just like the Snapping and Skimming buttons, only engaged (though still not showing the parameters) when I'm holding the mouse button down.
I read in another thread somewhere that the Snapping/Skimming issue was cured by deleting ALL preferences, not just FCPX's. I'm not wild about doing that as it will certainly cause trouble in other apps, but unless another idea comes about I have no choice.