I think it was a bug. I had to go back about 3 hours of time played to find a save that wasn't showing the same symptoms. I was between the third and fourth preseason games when I gave up and went back to just after the draft .
Some things didn't replay the same. In particular, the last player I signed before I noticed the problem wasn't cut by his team this time through. I did try to simulate the problem by (saving and) signing other players (before reloading) but it never recurred. This time I entered preseason with about $4M cap space.
One other thing I forgot to mention, while I was unable to sign players from the FA Pool, I was able to bid on players that would have taken me from $2.9M to below $1M cap space.
It was very important to building my new team. After final cuts by the other teams, I cut and signed 11 players including two (marginal) starters!