Fixed!
It turns out that I set up the Webdisk login in a subdirectory of my home directory on my bluehost.com account (~/webdisk/omni), and set up a separte username and password to login to this directory. This login starts the session in the directory "~/webdisk/omni", and so the the proper settings for the iPhone are
https://xxxxxxx.org:2078/ instead of
https://xxxxxxx.org:2078/webdisk/omni
I still think this is a bug, because "https://xxxxxxx.org:2078/webdisk/omni" is what I used on OF 1.1 on the desktop (and it worked), and it is what was transferred to the iPhone when I used "Share Settings" in the Sync pane of OF 1.1 preferences. This should be looked into.
Thanks for such a great product.
Cheers,
Ben