By taking the drastic step of actually reading through ALL of the install instructions. Silly
In my misguided attempt to run my ROKU 3 through the AVR 154 HDMI switch, I had run an optical audio cable from the TV to an available OPT input port on the AVR. This (now understandably) was a futile (dumb) idea since there was no connection to the ROKU but it had no effect...I thought. It clearly stated in the manual that NO video outputs from the TV should be ever be run into the AVR 154 or video anomalies could result. After removing the optical audio cable, the AVRs HDMI Monitor Out now functioned as advertised. ALSO found by reading the manual (Mr Smarty Pants) was the information (hidden in the actual system specs) that the HDMI #3 output (unlike #1 & 2) was 'switchable'.So...there was the mystery solved:

Running optical audio output from TV also confuses the AVR as to handling of HDMI signal (sometime it works; sometimes not)
The HDMI #3 IS different from #1&2 and can act as general HDI input from the AVR to the TV (display).

In closing I would second an ironic but valid comment someone posted in a discussion group about the HK AVR 'issues': It used to be (20+ years ago) that audio systems were pretty much plug and play and PCs were complicated and time consuming to configure at installation. Yet, now, decades later, Harmon Karden, the inventors of stereo, now present the inverse to their users. Incredibly complex (to the average consumer) setup configuration protocols, wrought with caveats and warnings, while PCs are by and large plug and play out of the box.

How the worm has turned. Still...HK quality of both hardware and audio performance is outstanding ..once properly setup.