Ooma agreed to send me a replacement unit. Before packing up the original unit I had a thought. I placed a L1/L2 type splitter on the wall jack, then connected the L2 side to the Ooma's Wall port with a phone cord. Success!! All incoming calls rang correctly. At one time I had two lines coming into that jack into my home office phone. Prior to getting the Ooma, I had only been using L2 which my phone was capable of distinguishing. Apparently the Ooma Telo looked for a tone on the L1 pair of the cord from the wall. When it didn't detect one, it reported that no line was connected.
I passed this along to Ooma tech support in case it might help them diagnose someone else's problem (oh, and I cancelled the replacement). A simple L1/L2 splitter saved the day.