I deleted the previous post as I wanted to word it differently to be more clear.
I completed the project listed earlier in this post and moved on to a fresh project. The new project was so early in development, the dashboard only consisted of a few basic dashboard nodes with no formatting. I experienced the same issue where the layout editor was frozen. I refreshed the page, rebooted Node-RED, rebooted Pi, rebooted PC, all had no effect just as mentioned in the post. However, I tried the weird fix that worked last time and to my surprise it worked again.
- Lock, Unlock, and Lock all dashboard items.
- Deploy
- Refresh IDE page
This allowed me to once again move items in the layout editor (normal functionality). No restarts needed. I'm not sure if this will help anyone else or what the cause of this bug is, but at least I seem to have stumbled upon a repeatable solution...for now 
