Web wallet is down?
Yep.

And when I downloaded the 2.0.1 wallet and select restore and use the seed phrase from the online wallet.... at that point the windows gui wallet does then contain the address that my online wallet had
BUT balance shows zero despite syncing all day, and my online balance should not have been zero (cryptoknight shows payments to that address)

You won't see a balance until you are fully synced. If you are fully synced and still can't see your balance try clearing the cache by heading to settings page and clicking wallet creation height. Make sure its on 0 and then hit save.