Well, it seems that while Linux checks to see if an IP is in use, DR-OS does not. Grrr.
What I did was to modify the recovery.srd file to replace "-encrypt aes256" with "-encrypt none". The restore is now progressing. There are notes in the output that drive based encryption is being used.
I'll file a support request asking why my modification enabled the restore to run.
Thanks for your assistance, Sebastian.