That sounds pretty strange, in terms of if that's what resolved the issue.  That being said - if it is working OK now, great.
 
I don't understand what would have gotten 'fixed', but I suppose as long as you are working.....
 
Bob Bone
 

First off let me say thanks to those that have participated in helping me solve this. I'm not sure it's actually solved but I have a much better handle on it than when I first posted. I add this post as a matter for anyone who is interested. Here's how it stands now:
 
With a blank project:
If I insert a synth track BEFORE I insert a midi track, the keyboard controller works right away. However if I install a midi track first and then the synth, I get no sound UNTIL I record something. (admittedly this is still puzzling me)
 
With an existing project:
The keyboard controller works right away since I made the changes to the driver settings I mentioned above.
 
Thanks again. 
 
 
 

You mention inserting a midi track and a SYNTH track?
 
Should be midi and an audio track, if kept separate, or if you want to combine - it would be a single Simple Instrument Track (which has both audio and midi in it).
 
Bob Bone
 

You don't need to insert/create any tracks ever when working with soft synths. When you "Insert soft synth" all necessary tracks and the routing are created automatically according to you choice. It's quite possible the mysterious problem was somehow caused by the unnecessary complicated workflow of yours.

Well, some folks choose to manually insert audio/midi tracks, rather than use the dialog box options for Insert Soft Synth.  
 
I began doing that out of habit myself, because I so frequently work with different numbers of audio and midi tracks for multi-rack instances of Kontakt, where I take advantage of its multi-timbral capability and load multiple instruments.  Since the number of instruments varies, and I also do output channel renaming and have to go in and name the audio and midi tracks anyways, as well, I just do the inserts manually, and it works fine for me. (I myself never use Simple Instrument Tracks though - always have separate audio and midi tracks instead).
 
I am still wondering about what kind of tracks were inserted (see my earlier post), and am hoping to get some sort of a response from the OP on that.
 
Bob Bone
 

robert_e_bone
Well, some folks choose to manually insert audio/midi tracks, rather than use the dialog box options for Insert Soft Synth.  
 
Bob Bone

Of course everyone has his/her preferences, but when things are not working, and the user may have beginners problems, it would practical, IMO, to take the easy way first. Things like adding a MIDI track and then inserting a synth using Simple Instrument Track option (as the OP described his workflow) can easily lead to wrong routing etc.

Kalle Rantaaho

robert_e_bone
Well, some folks choose to manually insert audio/midi tracks, rather than use the dialog box options for Insert Soft Synth.  
 
Bob Bone

Of course everyone has his/her preferences, but when things are not working, and the user may have beginners problems, it would practical, IMO, to take the easy way first. Things like adding a MIDI track and then inserting a synth using Simple Instrument Track option (as the OP described his workflow) can easily lead to wrong routing etc.

I somewhat agree with this, except that I think it's good for noobs to learn how the routing works by doing everything manually. And you do have to create extra MIDI tracks to take full advantage of a multitimbral synth; SONAR can create all the audio output tracks for you, but it won't ever create more than one MIDI track.