Connect the iMac via WiFi and it will fix it's self after about a day. Or follow the more involved steps in this support article.
About three hours after connecting with WiFi the problem is solved, the "Incompatible Kernel Extension Configuration Data" now shows v3.28.2, the router blinkies are shining, and all is right with the world.
Thank you Tom!
But I have to wonder... why is there not a big outcry on the internet about this problem? Wouldn't there be millions of computers affected? Or do they roll these updates out in little batches and find and fix the surprises before they can affect very many people, and SWMBO was one of the "lucky" ones?
tanstaafl.