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I found an answer that worked here:
Re: SQL Developer on Mac OS X Lion (10.7)?
Essentially I had to install Java?? From here: http://support.apple.com/kb/DL1421
The really strange part is that I did the Lion upgrade on my laptop and SQLDeveloper worked without a hitch there.
At any rate. Hope this helps the next person with this same issue.
Oh and I had to re-edit my sqldeveloper-Darwin.conf file to put in the new path to java home: