Turns out you have to know how things work to get it to do what you want.
The first thing I tried was to manually change the ethnicity of each player to caucasian with the idea that the new, modified ethnicities.txt file would create the new players correctly. After I finished the 16 major league team and thought about doing the 3 levels of minors, I realized this was WAY too much work.
So, I went back to the template I had saved before I created the league (HINT: Always save a template before you hit "Start Game"!) and restarted it with the correct, modified, ethnicities.txt file this time.
Well, as you might guess, it worked like a charm this way. If you want to create a set of players to a unique set of specs, (all white, all black, all asian, etc.) change the ethnicities file FIRST, and everything works great.
Steve, you can remove this issue as a problem - I just had to understand what I was doing