In a reply from Alex Jordan to Bruce Yoshiwara, Alex explained that now the definitions of the bizarro arithmetic options need to be on the context BEFORE any objects are created.
It's interesting how this did not used to cause a problem, but it's great to get this figured out!! I am sure it will prove helpful in many other problems too.
Here is a link to that thread: http://webwork.maa.org/moodle/mod/forum/discuss.php?d=4364&parent=12549
Paul