I set my ASIO drivers to .7 ms - the absolute lowest @ 44.1kHz.
However, when I play the keyboard into Sonar, there is a marked latency - hard to guess how much - but I'd say it's at least 30 ms or so.
Playing directly into Kontakt (external), I do not get this latency.
What is causing this? How can I adjust it?
Thanks in advance!

I should add that I do toggle the PDC button - to no avail.

Okay - here's another clue:
I delete all MIDI and audio tracks from a template - and all efx on the buss.
Then, I add a single MIDI track playing into a single Audio track.
Ta-dah! The latency is gone.
Could it be caused by having too many tracks / softsynths /  audio efx??

Try the FX button
if the latency goes away, that is because there is PDC caused by plug-ins on tracks other than the one(s) being recorded. For more info see the FX and PDC button documentation in the Mix module help.

I'm wondering: if an effect that uses look-ahead is on the final bus, would the PDC button really change the latency? My view of the PDC button was just that Sonar would not synchronize the output delay from all the tracks. It could not prevent any effect from delaying its own output while it is doing the look-ahead.

You may be on to something. I do use a Limiter with Look Ahead on the final buss.
I am in the process of slowly eliminating efx to find the culprit.
 
What about ProChannel efx? Are these high in latency?

Only some effects will cause the midi latency, most are OK. And Pro Channel seem to not cause issues, at least not for me. But for sure the LP EQ and Multi band will instantly cause a huge midi delay.  
And to the OP, you could have a zillion midi and audio track and you should not get a delay,, it is almost for sure a plug in. 

Anything with look ahead will introduce latency.
These will usually be dynamics Fx for obvious reasons

Click the PDC button while tracking?

It's not just dynamics processors using look-ahead that can cause latency, quite a lot of others can as well. Unfortunately most plugin manufacturers don't reveal how much latency their plugins introduce, one notable exception being Waves.

And plugin latency can vary with sample rate as well, just to make things more complicated.