Thanks all for the responses. I tinkered with the bike last night. The chain does not appear to be too long. It was not sagging at all when I had it in the small front chain ring and small rear cog. I also pulled back the rear derailleur cage as suggested by cny-bikeman and there is no observable twist to the derailleur cage. I have not yet checked the derailleur hanger, but my assumption is that if it were a bent derailleur hanger, it would affect the shifting in the large front chain ring as well as the small. I also checked the B-screw according to the Park Tool webiste instructions. (This is a 10 speed Shimano 105 derailleur). Frankly, when I loosen or tighten the B-screw I dont see a whole lot of movement in the derailleur in relation to the rear cog (at least with respect to the largest rear cog). I haven't checked the B-screw adjustment to the other rear cogs.

A question on measuring chain length: In Leonard Zinn's book on raod bike maintenance, he says that when the chain is the correct length, the jockey wheels should be in a straight line perpendicular to the floor. Is this a proper way of measuring chain length? If so, my jockey wheels are not perpendicular, but angled at about 75 degrees.