OK, final entry...
Short answer - In the end, I uninstalled (thoroughly!) Toast 11, and re-installed Toast 10.5. It offered to update it to 10.9, but so far I have refused. Roxio says that v10 is not supported for Mt. Lion, but that with the last update, it should work. 10.5 opened fine, and immediately started mounting all my sd2f files with no problem! I had previously tried 10 after already installing 11, and had the same issues with crashing, so obviously it was drawing off some of v11 install. But by itself, it works well.
As well, it still translated my flac files into sd2f format with no problems as well. So my recommendation for the original poster is to get hold of Toast 10 and use that. As I have a dedicated machine for my music library that I don't use for burning CDs (though I don't think it would matter) or any other conversions and such, I will happily use Toast 10 on that machine until it doesn't work anymore. I can still use Toast 11 on my other machines that I do other stuff with.
I did come to this solution after trying a number of other things. There are several file conversion tools out there that are good, so that if I had to go back to my original flac library and rebuild, I could have done this. I tried XLD, xACT, and Max. Of the 3, I liked Max the best. The problem with it is it hasn't been updated since 2009, and is still in a version under 1.x. But it worked fine, and easily had the best interface, allowing manipulation of the files, editing of the metadata, and editing of the album image all in one happy screen. As well, once you had it together, it would export AND put the files properly into the iTunes library such that everything showed up in iTunes without a separate import necessary. So it worked great, with one caveat. If you have all the metadata already embedded in your Flac files, this will be awesome. But, if not, then you have to enter it in yourself.
For me, I have a large library of live recordings that don't have metadata embedded. The whole point of using Toast to create sd2f files and being able to mount them as a CD is to be able to import them from the CD into iTunes, such that iTunes will then scope the Gracenote CDDB and enter the info automatically. iTunes doesn't do this if you simply Add Files to the library, or drag them in. It won't access Gracenote unless files are imported from a CD. Due to the large community of live tapers, most of the recordings have been entered, and simply need a little format editing for me to make them the way I want. Much faster than manually entering all the info (especially each song title).
The problem with Max, xACT and XLD is that they don't access Gracenote, presumably because it's not free. They access freedb and musicbrainz, neither of which seem to have any of the live recording info necessary. So while Max worked really great for my CD backups, and my own recordings that I've entered my personal metadata into, it was not so great for the live library. This is what drove me back to checking out Toast 10 w/o v11 installed.
In the long run, those sd2f files will become obsolete if Roxio doesn't bring that feature back. Fortunately, I still have all the flac files as backup, and redundant backup of my music library as well, so that trustfully I'll never have the need to go back and re-process all that again.
I had forgotten that Roxio had been bought out by Corel, and this is a major red flag! I've had many software titles from the creative side of the fence over the years that Corel bought and either terminated or obsoleted features on, etc. without warning, and no intention of updating or bringing back. So I'm not fond of Corel, and have little hope for Toast maintaining good functionality going forward. So find your alternatives now! it's just a matter of time.