Thanks for your comments! The lower window is 23.7km, just above the pre-deploy threshold, so I guess that's why I didn't see anything happen. There is no 'run test' option in the parachutes context window. So, I was able to complete the contract after a half dozen more tries, but I'm not sure why it worked. I simply continued with my bashing of the spacebar and it miraculously worked. If you end up at this thread and had a similar problem please post! It's possible this is some sort of repeatable bug.