Some progress and one remaining problem. I'll recap what worked for me in case anyone else searches this thread in the future.
What worked
Using the manuals posted in the QT thread, there are only three wires/functions that don't translate directly over between the two generations of heat pumps.
1 - CCC2 requires a new ambient temp sensor to be installed.
2 - Medium fan speed
The original Penguin II units did not have a 3 speed fan and a 2nd gen unit would have this wire capped off during the conversion to CCC. It needs a new connector crimped on and connected to the medium fan connector on the CCC2 board.
3 - Reversing valve
Based on other threads here, the old units defaulted to heat and the new units default to cool from the reversing valve's point of view.
The CCC conversion required us to splice one of the purple reversing valve wires to a common/white wire. CCC2 does this via dedicated connectors on the CCC2 board itself. T6 and T7 are a group of terminals on the CCC2 board for the neutral/common connectors.
So, one violet reversing valve wire connects to the reversing valve terminal on the CCC2 board. The other violet reversing valve wire needs a new connector and goes to T7. T6 goes to the common/white wire grouping on the run capacitor. I had to use a piggyback connector because I ran out of terminals on the common group on the capacitor although I believe this is not recommended. I will change it later.
The manual says it doesn't matter which violet wire is used for the two connections.
Problem -
At this point, I have a brand new unmodified heat pump that works as expected with the new CCC2 thermostat. Heat and cool.
My converted unit works correctly in cool mode. However, even after resetting the thermostat multiple times to read the DIP switches, heat pump (HP) mode does not show up on the thermostat.
The CCC board I removed had no heat pump dip switch at all. I don't know if this is normal and was hoping someone here knows.
My model number translates to a black Penguin II heat pump although my unit is white.
I assume it really is a heat pump and not an AC-only unit. Otherwise, it would not have reversing valve wires if it were an AC-only unit, correct?
My only thought is that the DIP switch is not quite seated correctly and may not be fully "on".