No.. it wasn't the WP update. I had (sometime ago) added some code to "force" the kitchen sink open, by default. So, even if someone would save it closed... it would still force open when reloaded.
I did this because so many people don't know how to use the button... and I received mass emails from people saying their buttons were gone.
Then.. I decided I don't want ANYTHING in the plugin which is not user-enabled. Meaning... I don't want to force anything.
So, original functionality is restored... and the button will now save in it's closed state... if you desire.
Hope this helps clarify.
Also... please mark thread as resolved. Thanks.