Got it to work. Here is what worked.
1. Changed compression from the default zip to none.
2. Changed the Joomla Installer from 1.0 to 1.0.11 but this may deal with restoring the site. That is, this change probably has nothing to do with my latest success.
3. Both the filelist and database strategy was set for multi-step (huge sites).
4. Left the Firefox browser window on the backup site until the backup was completed (2-3 hours). There is a message indicating to not browse during the backup but I didn't following the directions previously.
1. Site has Joomla installed with one template and one extra component (Joomla Pack for backup).
2. Site has jpg photo directories but these were excluded from the backup. However, when the file list was created, each of these excluded directories and subdirectories were displayed which seems wrong.
3. The final backup size was 575 MB which seems far too large for a site with just Joomla backed up.
4. I did get one timeout warning during the database backup but it wasn't fatal (updates later occurred).