Yeah, I think it's the fingernails I added. Those things have to be one of the worst things I've ever bought for G3 characters. Difficult to figure out how to use them, and now this. I removed them and it works fine. I thought it was due to my scaling/shrinking the cloth mesh too much, but as best as I can figure it was the fingernails.

Thought it seems strange that a piece of fitted "clothing" would cause a problem. Anyway, lesson learned. Remove ALL smoothing modifiers and get rid of fingernails.