I did a slightly different workaround. I exported the effected subtools as .obj files with high res displacement maps. I then imported the low res .obj files in version 4 re-subdivided them to the same SubD level as the ztool in 3.5 then apply the displacement maps.
It works well. Once I got a workflow established it goes quickly as well. IN fact, I find that I can slightly optimize the models even, by only dividing them to a Sub D level or two below the 3.5 sculpted version before applying the displacement maps.
Not ideal, or as easy as simply opening the 3.5 ztl files, but at least it works, and I can continue work on the projects now in V4.
Still not sure what triggers the problem. It seems pretty random. At first I thought it was Sub D level related, but some of my tools, of even higher subdivisions, import perfectly fine.