Since yesterday (June 12, 2016), I could no longer use the debug tab as the message about waiting for the files to transfer would never clear. I searched the forums and read everything I could find and tried every avenue. The result of this is that I reinstalled XDK (ver: 3400) on mac OSX 10.7 and app preview on IOS 9.3.2. I also re-created my developer certificates and provisioning profiles from scratch to make sure that all was well.
Now I cannot get a signed version of app preview created by XDK, I get the familiar error message "Error encountered while creating a signed version of App Preview. Suggestion: Retry."