Thanks again for the reply. Here's the latest (working better .. I think 'noise' was the issue):
Figuring I was going to rebuild my system anyway (and I had a backup), I took your advice, larryllix, and did a factory restore on the ISY. From there I tried to add/link one device (an on/off switch) and it still didn't add. Tried a different device and had the same. I tried this a few times and while I don't remember the exact order, as I was doing different things, I did encounter the same as before: "cannot determine insteon engine" as well as finally when I click Finish on the linking box, in the event log I see a [LNK-END] 02 65 06 :: Unexpected, ignored (65) and then a few rows down I see the device that I was trying to add with a msg "[LNK-STAT ] 02 53 M(01) gid=02 50.BC.A8 1894 73 : : Unexpected, ignored (53)". Many of the other posts indicated that these errors might be communication errors due to signal 'noise'. Only like two weeks ago, I happened to add a small UPS battery backup and it happened to be connected to the same outlet as the PLM -- maybe, I thought, but my issues started before that. Prior to adding the UPS I had a power strip connected to the same outlet as the PLM (now the power strip goes to the UPS). I don't remember exactly when the power strip was added, but seems it was way before I started having issues (maybe something new along the way that I plugged into it?). Nevertheless, I disconnected the UPS from that outlet and put it in another (different circuit); the PLM is now in that outlet all by itself (the only other thing on that entire circuit, I happen to know, is a refrigerator) and now I'm able to link devices again and they are responsive! At this point I delete the few devices I just added/linked, 'delete modem' (again), and then restore from backup. My devices were working better but not all were responding after the 'restore modem', so I performed a 'restore devices'. Still not all were responding so I started linking in AC and went to those individual devices and set them to link, finished linking in AC, and now all is working as it used to -- fast, normal, and responsive again. Hopefully it stays this way!
Thanks for the suggestions along the way!!