Hold that thought... it looks like there's something majorly amiss with the new kernel. My first test after setcap succeeded, but my subsequent tests all fail with the original error. Even if I wipe the cap and reset it, and/or reboot, I just get the original error now.
I have proof in my scrollback buffer, however, that this did work once, so I know I'm not nuts... Very strange. I'll come up with a small test script and see if someone else can reproduce this.