I will answer my own question, in case somebody else has this problem:
It was a permissions issue. Rather than figure out exactly which files were set incorrectly, I changed all files inside the City of Heroes.app container.
You'll need an administrator's password to do this:
1) Open Terminal in the Utilities folder of your Applications folder.
2) type cd "/Applications/City of Heroes.app"/ and then hit return
3) type sudo chmod -R a+r Contents and then hit return
4) enter your admin password when asked and then hit return
5) type sudo chmod -R a+w Contents and then hit return
6) type sudo chmod -R a+x Contents and then hit return
7) Close Terminal and try to launch the game.
An inelegant solution, but it worked for me.
Just installed on a new MacBook. When I run from the account I installed on, everything runs. When my daughter tries to run on her account (her account on the Mac, not her CoH account) she gets the error:
CohUpdater is already running, you can only run one at a time
CoH is not running anywhere else on the system, nor is any other account even logged on. Parental Controls are not on, Firewall down, nothing abnormal going on. I suspect a permissions issue, but she has read/write for the CoH app. What's up?