Finally received a reply from Adam Howe at Abacus.  The solution was to uninstall FS Repaint 2.22.53, delete the folder and any remaining contents, then turn UAC completely off in Win7 (requires a reboot to take effect).  Reinstallation (as Administrator) rebuilt the files and it works fine, including sending a proper bitmap into Photoshop CS4.

Apparently, the UAC was blocking the bitmap file from Photoshop.  Why the aircraft folders disappeared, no one knows, but they're back now.  I have reset the UAC to the previous moderate setting so I hope that now the paths are being recognized and things will work properly after the UAC is reset.  If not, I'll leave it off as I did with Vista.

Note that uninstalling and reinstalling with UAC enabled did NOT work.