Devon, your first picture and explanation is spot-on. As for the second picture, I'm an Aerospace Engineer who specializes in fluid dynamics. So I feel qualified to say that the second picture (and your explanation of it) is mostly correct. The upwards force is partially a component of drag and a component of "lift" in the airplane-wing sense. My suspicion is that it's more similar to the physics of a kite than that of a wing....but I don't know that for sure.
Lynne, one thing you said is that if you rotate about your CG then your CG would be lower. This is by definition not true. However, if you rotate about your CG (as best as you can tell), then the center of buoyancy of compressible air cells becomes lower. Rotating about a point SPECIFICALLY DEFINES that the point doesn't move. However, your overall point was right that by rotating to flat your wing gets lower, compressing it and making you less buoyant.
Having said that, I feel the need to clarify that trim and buoyancy are completely unrelated in all but some nit-picky scenarios using mixed jargon. A diver with good buoyancy control should be able to move around in all orientations while maintaining perfect bouyancy without any sort of propulsive force. I'd bet if we got Lynne in a deep pool, we could prove this. If she were in proper posture and closed her eyes while I spun her around and oriented her weird.....I bet she'd be able to hold accurate buoyancy in that orientation. Perfect neutral buoyancy is simply a matter of weighing exactly the weight of the water you're displacing. Bill, I have a suspicion that you were compensating for poor buoyancy with vectored thrust (Andy's pictures and explanations) which is something I was doing up until recently due to bad trim in SM. If not, I'd be willing to bet that you're not pivoting around your heart but around your knees. Pivoting at the knees is what most divers feel comfortable with. If that's the case, your wing would be MUCH lower, compressing more, and making you less buoyant. If this sounded harsh, please realize I didn't mean to be offensive at all....I just meant it as a completely cold and scientific explanation of the mechanics behind buoyancy and trim.
PS-- I already defined buoyancy, but I forgot to define trim. In the paradigm of scuba, trim is defined as the center of gravity lining up with the center of buoyancy. Any difference in location (as seen from above in proper horizontal trim/posture) creates an arm for a force to apply a moment about. Distance differences in the Z direction (up and down in the water if you're in proper horizontal trim/posture) effect the stability of the system. If you're really interested in it, hang an extra 15# of lead from different parts of your body and you'll eventually find your center of pressure. You'll know it because you'll be forced into a stable mode where you have to fight to no longer be in good horizontal trim/posture. If you take your wing and sit on it and put weight on your back, you'll find the opposite effect of stability. I know that was long-winded and possibly technical (read: too detailed)....but that's the Engineer in me talking.