I uninstalled SEP11 completely (add/remove programs) from my Win7x64 machine, and the protected mode problem was still there.
After I reinstalled SEP11, I determined that reader 10 would work properly with a different (local administrator) user profile on that machine. I am now looking at possible problems related to roaming profiles and redirected application data folders. Adobe will fix this eventually, but someone with a full version of acrobat will need to make the support calls.
The strange thing is that everything worked with version 10.0.0.