Well, I put this issue aside to think about, and was out of the office for a few days. When I returned this morning I saw in the DNSBL log files that another Win7 box on the network is now listed as blocking sites. It is a box that last week was tested and was not working. So I tested my own Win7 box, and now DNSBL is now working on it. My box had not been shutdown or rebooted between the time it was tested as not working, and today when it is working.
So I don't know what to say other than there is something fishy in the Windows network stack. All of our LAN boxes get their network, dns, dhcp, and gateway information from our dnsmasq server, so they are all configured the same. We are running the Avast Antivirus clients here, but I do not see any option to re-route the incorrect dns queries to the proper address. And we are not using a proxy here.
Anyway, I will now consider this fixed/solved. Even though the true issue is still not identified. I give up and will move on to something else.
Thanks for the input.
Jeff