I figured out what I was doing wrong. Sigh, I was flashing the recovery zip file instead of extracting the .img first. That will teach me to do this stuff in the middle of the night!
I wonder how often this happens? We are used to flashing roms, gapps, button switches as zips but for the recovery, you need to extract the img file and flash it, not the zip. Unfortunately, flashing the zip into recovery "works" in that it is able to write the data into the recovery partition, but it won't boot recovery!
Just remember the golden rule to never flash both new recovery and new rom at the same time - make sure that the one you are NOT flashing is working first. Then you always have the other one available to recover from mistakes or problems. In my case, I could just keep booting the cm11 rom and use adb to fix the recovery problem.
I think I've got it all working properly now. Here are the filesystems I have:
Filesystem Size Used Free Blksize
/dev 207.4M 136.0K 207.3M 4096
/sys/fs/cgroup 207.4M 12.0K 207.4M 4096
/mnt/asec 207.4M 0.0K 207.4M 4096
/mnt/obb 207.4M 0.0K 207.4M 4096
/mnt/fuse 207.4M 0.0K 207.4M 4096
/system 356.1M 224.4M 131.7M 1024
/data 1.4G 120.6M 1.3G 4096
/cache 371.9M 10.1M 361.8M 1024
/mnt/media_rw/sdcard0 12.7G 202.2M 12.5G 8192
/storage/sdcard0 12.7G 202.2M 12.5G 8192
Look at all that space! This is a great solution you guys have come up with!
I can confirm that the wifi password is forgotten on reboot. Also confirm problem with play store, although it's still called play store. I can go there and search for apps - I was using es file explorer as my test case. The play store seems to be hanging after clicking the install button. My phone is VM670ZV5.