Reporting back - I see they just released V7.0 M040 today, so I rebuilt my environment since I might as well test with the latest.
I deleted every override (APP or otherwise) in my stylesheet and any linked module. I re-saved them and also did the Tools>Validate Stylesheet and got the No Errors message.
I am guessing that given I get output, that it isn't something major - however, I'll likely open a ticket with PTC to see if they can determine the cause. Our application setup has worked well with Arbortext 6.0 and 6.1 throughout various maintenance releases.
Thanks for the suggestions.
Rob.