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Ate dinner, changed php.ini to enable allow_url_fopen, and xoopsheadline works again.
Until this conflict is resolved (not sure a blogroll can be implemented in php at all if allow_url_fopen is off), then I wager there should be a disclaimer in the Protector advisory page stating that any module accessing external urls will fail if allow_url_fopen is turned off (including the display of XOOPS News in the admin section).