Michael, Richard and Lance: thank you all for your generous comments and support, they are much appreciated! Richard, thanks further for your incredibly generous offer which I am going to decline as I explained in a PM.
Here's where I currently stand: Given that I am no longer under any pressure to meet a deadline for this build, I have purchased a fresh set of lozenge and will take a second go at it when they arrive. I took Justin's advice and attempted to re-bond the silvered pockets, which seemed to help reduce the silvering somewhat. I also added a couple of fresh coats of Aqua Gloss in an effort to build up the platform for masking. Additionally, I spent a bit of time working through mixes for the lozenge colors to repair the damage shown above. All good so far....
After letting the gloss coats dry for a day, I decided to take a go at painting the crosses using the file I set up for the Portrait cutting machine. Rather than risking the frisket material which caused my initial problems, I cut the masks using some thin origami paper that we had in my kid's craft supplies. I purchased a stick of 3M Scotch Repositionable Glue Stick, which basically turns any paper into a Post-It note, and used it to apply the masks to the wings. As is probably obvious by this point, I'm not happy with the results:

There are two issues, both of which can be seen above. The first is that my homemade "post-it" masks just didn't give me a sharp enough seal, and the borders look sloppy. The second and bigger issue has nothing to do with the masking materials, but rather the poor job I did aligning the crosses with each other. Unlike using decals where you see alignment issues immediately, it can be tricky (for me at least) to see small alignment issues until paint has been laid down and it is too late. This is especially true when the opaque masking material (origami paper) conceals much of the wing surface (and further confuses the eye by introducing additional edges). To assist with this going forward, I have amended the masks to include small strips running through the black cross area (which is removed prior to painting anyway) that line up on the wing ribs to keep things in line. Additionally, I have cut a strip of paper the width of the crosses to make sure the pairs are pointing towards each other. I hope that all makes sense.
I am chalking all of this up to a learning opportunity (actually a number of them... decal setting, insignia masking, etc.) and moving on; hopefully not making the same mistakes twice. The universe has told me to re-group, and I have decided not to fight it.
Thanks again for the comments and suggestions that everyone has given me; they have been very helpful. Thanks again to Richard for his generosity. Comments, suggestions and questions are more than welcome.
Chris
Oh, p.s., in other news, I have added the few small (id number) decals to the fuselage and tail assembly, and have begun work on the Gaspatch Spandaus. I will post pics when I have a bit more done.