Kirk:
I had the same issue with a set of images that had previously merged in CS. I tried the preference reset and it did not help. Hugely puzzling, but this problem did happen AFTER the last CS4 update I installed. So I then bit the bullet and did a fresh install just to get CS4 working right agin -- a huge PITA, and while it seemed to clear up a few other minor issues, it did NOT fix the merge! Frustrated, I DL'd AutopanoPro in demo mode, and in less than half the time of CS4 it performed the merge and did a significantly better job on the color blending. Bottom line is I went ahead and paid for AutopanoGiga and have never looked back. My only nit with APP/APG is that if you edit in Profoto colorspace as I do, APP dies not render the colors accurately, so I do NOT use their color correction tools, I just use it for the merge. APG allows you tons of adjustability on the projection, horizontal and vertical line corrections in combination, midpoint selection and distortion corrections. Very cool and worth every penny IMO.
Cheers,