Hi Henrik and all!
Just an update. After rebooting my computer things settled down and became more reasonable. I did some intense research and it turns out the TXB0104 does not like a capacitance load on any of the output or input pins of more than 70nf! So while twisting the wires seemed like a good idea (suspecting noise) it just made everything worse! I cannot believe they would make a device with such limits! Also I got my 3.0v regulator and things again look good. Thanks. Best, Ed