After resetting PRAM, removing multiple 3rd party S/W and many other S/W fixes, I finally found a solution: the Bluetooth module (H/W) was dead...bought and installed a new one...everything's wonderful.
http://www.ifixit.com/info/install-difficulty Note: in my case, the beachball of death was spinning when ever the mouse was over spotlight...the menubar routine kept looking for the BT, never found it. Until I replaced it with a new one.