Rather than dash off a snappy response about wasting more of my time, I decided instead to try your first suggestion and, low-n-behold, it worked...  

So, not really sure what is going on here, but I can confirm that manually selecting paste from the right-click menu in the title bar does, indeed, paste text into both the password and recovery seed prompts in the wallet.

I suspect this only makes the proverbial water muddier, though, as far as finding a root cause/solution.

EDIT - I did not try #2, but you do get the same menu by left clicking on the DOS box icon.