Okay, I just realized that I ought to come back and post my mistakes here because searching google had been no help to me (and it was simple logic that solved my problem):
You have to make sure that the mailboxes for the account have been created. I was trying to login to sieveshell as root, but hadn't bothered to create any IMAP mailboxes for root (since all mail was being forwarded, via sendmail, to my normal account on the system). SO: before freaking out, either test sieveshell with a user that has been added to the imap server (using "cyradm localhost" -> "cm user.foo"). Sorry to bother the list with this post, but this is an issue which slowed me down several days and I have seen quite a few posts asking for help with no answers. (I just stumbled across an old one while researching another issue with silkymail). ~~Matt