I considered caffeine, but it is not in the repository for Lubuntu 12.04. In any case, I prefer to avoid adding another dependency -- especially in a case where the problem was caused by too many dependencies with overlapping functionality.
I wanted to add one comment to my posting with the solution to the problem. I am having trouble understanding why X11 provides both DPMS and xscreensaver, considering that the functionality of the first appears to be subsumed by the second. Moreover, xfce4-power-manager triplicates some of the functionality. Having three modules performing the same functions seems like a bad design. Also, if my belief is correct that a recent upgrade to X11 activated the DPMS functionality, then a lot of users are going to be surprised as I was when their configuration of xfce4-power-manager and xsreensaver mysteriously stops working. This seems like a particularly poor upgrade policy for an LTS release.