[texhax] whoops

[Karl Berry]

    the line    "set TEXMFHOME=/Users/walt/texmf" followed
    by "export TEXMFHOME" both within .bash_profile in my home directory.

The word "set" is wrong syntax to set environment variables in Bourne
shells.  What you want is

TEXMFHOME=/Users/walt/texmf
export TEXMFHOME

(Although that should already be the default for your non-MacTeX
TeX Live, as far as I know, and you shouldn't need to set it.)

Running
  kpsewhich -var-value=TEXMFHOME
should tell you the value that kpathsea is seeing.  

If you have an ls-R file in your ~/texmf (not recommended), it must be
up to date.  Alternatively, I would suggest removing it.

The .tex files must be in a subdirectory like ~/texmf/tex/foo.tex, not
just ~/texmf/foo.tex.

If you run
  tlmgr conf
you will get a lot of output about variable settings and the like.

Hope this helps,
Karl