Thanks for the link Ben. most of that seems to relate to 2.0+ and since I'm trying to solve this on our 1.9.5 instance most of those admin and activity settings aren't there for me to adjust.
My newest development is that we have two instances of moodle on our server, same moodle versions (1.9.5). I did the same test on the second moodle instance (including a user who had the same email address as the user I had previously tested on the inital instance) and the notifications WERE correctly sent.
So I 1) rechecked the cron on both instances (ran both manually and looked at the report--didnt see anything amiss or much different on either) and 2) compared user permissions and found no differences pertaining to notifications (in fact on the inital instance that I checked, the student permissions are still all set to default).
So it seems that it CAN work but something is preventing the assignment notifications (since all other email are being sent as intended) from being sent, but it doesnt seem to be the cron, nor does it seem to be a user permission. I'm at a bit of a loss of what else to check...