Sorry for not posting back to the list.  Yes indeed,
this was the problem.  /opt/csw/var and /usr/local did
NOT exist in the global zone.   Thanks to James
Carlson for first pointing this out.

>  Have you verified that there is actually an
> /opt/csw/var
> directory in /opt/csw in the global zone?  Likewise
> for the /usr/local
> lofs mount.  Why are you using inherited-pkg-dirs
> for some of the
> /opt subdirectories?  Is there a reason you don't
> want to just use
> lofs mounts for those too?
> 
> Jerry
> 



 
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