Server balks at reading the web settings
I finally have had the chance to blow away this pesky server and no amount of digging yielded a clue how to avoid a reset of www - so that's what I did. I had since updated it to 10.7.5 Build 11G63 and the errors persisted on managing the web service.

I shut down all services except for File Sharing, DNS and Open Directory and did the following steps to force down apache and force a reset. Even trying to stop the web service using sudo serveradmin stop web kept failing with the errors above about xswebconfig and undefined methods of nil classes.

sudo apachectl stop 
sudo serveradmin command web:command=restoreFactorySettings
sudo serveradmin start web


At this point refreshing the Server app corrected the errors reading the settings. Thanks to this hint on cleaning up apache to get me most of the way to my solution.