Maybe something helpful... search_sort_by.tpl is also called from customer/main/subcategories.tpl. Eliminating that particular if statement from subcategories.tpl , has also eliminated the sort function from my products/category page.
I'm not exactly sure why, but the subcategories.tpl is the only other file I've run across that calls the search_sort_by. It's even more anomalous considering that I'm not using any subcategories.
