Update from the lit LED observed from yesterday: the power is coming from the parallel port (when a pin is raised) and going through the 328P. Odd!
I just plugged in port B to the STK600's push-button switches just to test input and port B is only reading 0xBF (instead of 0xFF). This means that pin B6 isn't reading input. I will have to check the data sheet to see if there's something special about pin 6.
UPDATE: well dang, looks like pin 6 can't be used if I have an external clock source active (which I do). I guess I'm glad to have discovered this now rather than later. So I will need to rethink my pin design.
UPDATE #2: well shoot... looks like none of the pin sets (B, C, or D) allow me to use 8 data lines freely. B6 is reserved for external clock sources, pins C only have 7 lines instead of 8 (and one of them is used optionally for RESET which I think I want to keep) and pins D are used for serial I/O and external interrupts. So I think I am going to swap out this 328 for now and put in one of my other AVRs that has more pins just to get this dang thing working! Then I can map out the 328's pins later.