I kept tinkering last night and was beginning to panic a little, and then I had the bright idea of deleting Jetpack as you suggest in option 3, and I did. It cleared up the issue and I can log in now. However, my blog which was not linked to my wordpress.com account/list of blogs until I tried to activate jetpack still shows up in my wp.com acct. and will direct me to login in from there too. So it seems I am back in operation, just sans jetpack and now kind of nervous to even attempt option 4.
Maybe I should go back and increase the allocation as you suggest and then retry Jetpack, but I guess the bigger question, is jetpack really worth it?
Thanks for the assistance.