I found a solution to the Steam version w/ Proton: I stopped using it! In my research, I found a number of people using Win 7 without any trouble. I did try to create a Win XP partition without any luck. Win XP has a tough time with SATA drives and other more modern hardware. I gave it up.
I went ahead and created a Win 7 partition and installed SH 3 with Steam. I then installed LSH 3 per instructions. I played the sim for about 2 hours without any hiccups. One mod I haven't tried is the resolution fix. In my research, I found a number of comments that said that changing resolution often ends up crashing the system. I've read through the instructions and think I may try it anyway. I've been running the sim in full screen and it looks pretty good.
The only issue I have is having to work with Windows again. I've been running some 'flavor' of Linux for about 15 years. Right now, I'm using Ubuntu as my primary OS. Now I have to deal with 3rd party de-fragers, registry cleaners, uninstallers, anti-virus software, etc. The Win 7 partition will only be used for games, so it won't be much of an issue.
I don't know why Steam lists this game as 'Win XP only'. From what I can see, SH3 runs flawlessly.
Now, another question for the group: where can I find a list of what each mod does?
Thanks,
Macgregor