On a last attempt before throwing all my PC setup to the garbage can....i changed the PCI slot where the Catweasel was...powered on my PC...and...voila! Everything is working!! Both ImageTools are reading/writing ADF images....must be the most bizarre thing it happened to me in a long time....
Hmm.. I wonder if the PCI slot died for some reason. I had an AGP slot die in a computer once. The video card was fine and the computer worked fine for years after I put a PCI gfx card in. IIRC I looked at the solder points and they were fine, so something else was going on.