Ok, it all came down to deleting these two files:
~/Library/Caches/com.apple.preferencepanes.cache
~/Library/Caches/com.apple.preferencepanes.searchindexcache
which automatically get re-created when you click on "Start" in the preference pane button for slimserver.
For some reason, the files as they were were messing things up.
Thanks folks (and good eye kanoot, that was a sneaky one to catch).
So as far as I can tell, when gremlins got your mac and you don't want to do the windoze approach of wiping the OS and reinstalling (ugh), do these:
i) run disk utility and verify system drive and permissions
ii) wipe out the files as outlined in this post
iii) wipe out slimserver and reinstall it (I didn't have to do that this time)
I really, really think this has to go in some obvious place in the documentation (maybe even the little booklet that gets shipped with the squeezebox) so that people that are not comfortable with surfing around the directories in a mac can still use the device "just like a cd player".
I assume that this is more an OS issue than an application issue (although I don't know for sure), but it's still a robustness issue with the device and its server if something upstream breaks as mysteriously--and then gets fixed as easily--as this one did.
One plus I'll mention before I go--the staff at slimdevices reads these posts and pitches in when they know something. They will have less of that to do if they put this tip somewhere.

Cheers,
trebejo
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