After posting this qustion - I joined the OpenLDAP mailing list. This seemed the best place to get an answer to the issue. I have since gotten it working, but I'm not clear about "how", but I'll give my "impression" (along with the impression of the OpenLDAP list community).
First, I want to make it clear that the OpenLDAP package passed the "% make test" process. That is to say that as user, 'gavollink' the test package was able to create an LDAP database using BDB.
Because of this, I started chasing the issue as if it were a permission problem (which seemed logical enough - forgetting that I'm running OpenLDAP as "root"). I asked to the OpenLDAP list and the most usefull response that I got was that my environment was hosed. (I have three active Linux Servers all running RedHat 7.2 or 7.3). So I instead asked another question, how do most users run OpenLDAP. Well the near unanimous response was anything BUT root.
So, I set up OpenLDAP to Launch as a user I created called "ldap". Suddenly it worked - it was able to create a database. Here's where things get foggy again. Once I ran it as the "ldap" user from these files, and I had set the config files, and the database directory to be writable by the "ldap" user - THEN I was also able to get OpenLDAP to run as "root". Even after deleting the database, and starting "fresh" it still worked. I don't have time to investigate further, but maybe this will help someone else.
G. A. Vollink