[texworks] Latest LaTeX downloads break XY Pic on iMac

[Tom Reinhardt]

Running on an iMac, software version 10.6.7, running the latest relevant updates from the TeX libraries, etc., I see that LaTeX no longer parses XY Pic diagrams that require under/over
arrows correctly:

For example 
-------------- next part --------------
A non-text attachment was scrubbed...
Name: latex-image-1.pdf
Type: application/pdf
Size: 34193 bytes
Desc: not available
URL: <http://tug.org/pipermail/texworks/attachments/20110415/6156cd33/attachment-0001.pdf>
-------------- next part --------------

should be produced by 
\xymatrix{A\ar@<0.5ex>[r]^{g}\ar@<-0.5ex>[r]_{h} & B\ar[r]^{f} &C}.

This works in LaTeXIT, as the diagram above shows, but does not work in TexWorks or in TeXShop?

Any suggestions?

TomR