Okay, for all of you who may have thought I was full of it, via a yahoo search of 40-permissions.rules and reading through a LOT of posts, I found this:
https://bugs.launchpad.net/ubuntu/+s...ev/+bug/210421
Basically, the syntax used in the 40-permissions.rules file prior to Hardy has changed. In addition, other posts suggested that any user changes now need to be in a user-numbered-and-named.rules file higher than 40.
So, I removed the 2 lines from 40-basic-permissions.rules and placed them in a new file called 41-cvs-permissions.rules, modified them to fit the new Hardy syntax, and guess what - it works.
So, if someone else is having problems with device permissions, people should pay more attention to the udev files and the changes made to them for Hardy which caused the old syntax not to be recognized. I suppose SOMEWHERE in some log file there are some cryptic error messages about this, but basically this is the fix.
Keep this in mind next time.
