Andrew,
Thank you for the help. I do have the original raw file, and it's preview looks normal. Info:
LR4.2
17" MBP 2012 (non-retina) connected to a NEC PA241w. Laptop calibrated with an i1, NEC calibrated with the X-rite OEM unit.
OS 10.7.4
Just to be clear, when I go into Develop the image redraws and looks fine. You got me thinking though. I use "temporary" catalogs for importing raw images then export the selects to a Master catalog as DNG's. I have a preset for that export with the JPEG preview set to: Full Size / Embed Fast Load Data, but neither Use Lossy Compression or Embed Original Raw File are checked. However, it could be that I mistakenly chose the canned LR Preset for "Export to DNG" which has "Medium" selected for JPEG size. Would that do it? Also, I made some additional Develop changes to the file after importing to the Master catalog.
I could try recreating the DNG from the raw and ensuring I use my preset.
Dave