Well thanks for your quick help on this. I never would have thought to check those database values.
Somehow they got switched around in these older databases we have here.
I ran sql updates to bring the ProductTemplate table up to date as well as the corresponding ProductTemplateId column in the product table. Restarted the app and all looks great.
Apparently the code is "expecting" the values of 1 for simple and 2 for grouped.