@ locecode
You were correct about the files in the testlevel folder. They can all be removed, but not the lightmaps folder. It must be there and that's what caused the loading error.
That said... still no joy.
@ ncmako
As you probably know, I had given up on FPSC a while back because of stupid, frustrating issues like this, but in another attempt to find a way to portray my stories, I just did a fresh, clean install of FPSC, Update 1.2, and BIM 10.6 and 10.7 Update.
I thought perhaps it had something to do with existing levels, so I created a new level with a room and two lights. All fine.
Then I delete one light and test again. Still two lights.
It seems that once a light is placed, it cannot be removed.