hysteria seems to come from people with a vested (or not so vested) interest in NYC -home of those danged liberals - not actually recovering, ever?

I've noticed that too. In all the news coverage I haven't seen to many people who live in the city being upset over it.

And I too am so tired of the media mislabeling it a mosque and also mis-stating it to actually be on Ground Zero. They also seem to miss what you point out - 2 blocks in NYC is a lot more distance than 2 blocks elsewhere.