Thanks, jstrawn. I tried what you recommended -- no difference. Actually it worked fine for the first 10 minutes of editing. Then as soon as I pulled a NEW clip from the project into the timeline (not a newly imported clip, just an existing clip that I had not used before in this sequence) and dropped it into the timeline, that is EXACTLY when things started jamming up. Doesn't matter now what sequence I'm working in.
I really don't think the cache's and preview files are related -- this is a UI problem. It's not about whether VIDEO is responding. It's at the sheer root of simply the timeline UI reacting to simple instructions from the user. Which, frankly, is quite scary.
I tried un/reinstalling back to 2014.0 to see if the issue would be there upon reversion -- but it runs fine.
So this is an issue with 2014.1 to be sure. Adobe -- please please help.