Hey, Spark - It was the theme. Apparently, some older less-maintained themes are going to break with WP3.5 and up. Perhaps the theme developer took some shortcuts or did some "clever" things that were never really supported in the WP Core but worked nonetheless - until now.
I attempted to contact the theme developer with no response. I took that as a "we're not supporting this theme anymore".
As WPyogi said - it's not WP 3.5 or there would be a lot of screaming; it is likely liberties that the theme developer took.
As for me - it was an opportunity to freshen one of my sites with a new look. AND I still have that theme running - for now - on some sites where I don't do a lot of editing, which is where it was impacted.