Aha! while trolling around on the web I was able to find the solution. Just in case anyone else runs into this problem, here it is:
It seems that the zip utility on the mac is not very clean. By default it includes ".ds_store" files in the archives. I guess it has something to do with the way that it reads its directories. These extraneous files confuse joomla and render the template invalid.
I got around this problem using an app called "Clean Archiver" to create the zipped up templates.
Problem solved. I hope that i have helped someone.
mike