OK so finally got to the bottom of this issue and my prayers were answered!
In case anyone else runs into this problem here is the solution:
The EV2 add-on was written using a deprecated method of .live(). The new method is .on(). I personally use a link to the most current version of jQuery and tried reverting to the last stable version prior to 1.7 where the .live() method was done away with, without success. Even using a dual jQuery listing did not work..
Fortunately the add-on developer got in on this issue and had me fix the current code in the eventscalendar2.js file so it works with the current versions of jQuery. Here is that fix:
Replace the last 2 functions of the eventscalendar2.js file to this:
$(document).on('mouseenter','#Calendar .isevent', function() {
id = this.id;
$('#' + id + ' .event').show();
})
$(document).on('mouseleave','#Calendar .isevent', function() {
id = this.id;
$('#' + id + ' .event').hide();
})
This will of course revert back to the older version if you upgrade/reinstall the EV2 extra. I have put in a request with the developer to have him update this code in a new version of EventsCalendar2.