Thanks Blueman. That did it. I’ve never trashed preference before, but after reading the Knowledge Base about it I just removed Defaults.xml, launched N7 and it created a new file that was considerably smaller than the old one. Oddly, all of the Preferences (File/Preference) in the new file are identical to the ones I had in the old file.
Seems strange to me that the Preferences file seems to be so fragile that Nuendo can not keep track of what is going on from update to update.