I finally got it to work. How? Full restore from settings did NOT do the job. I reflashed with the .32 SBF to clear reset my entire DX and then upgraded to .340. z4root worked perfectly then.
I'm wondering if everyone who had problems with root used a different version to root on .32 and then tried using z4root on .34. That was my unfortunate experience anyway. On the bright side, my Droid X is now completely fresh (newest OS, newest bootloader, newest baseband, and now newest kernel). The little guy is 'handling' like a dream now. Let me tell you: the forums were indispensable in helping to solve my problems. Many thanks to TBH for source files.