I see where the problem is not in the layout of the status panel. It appears that setBackground() does not set the color of the entire canvas. I would say that my "TheGame" class derived from Canvas is reserving space for a title bar. Although the bounds of cnvGame, an instance of TheGame include the whole canvas. The status text displays "Canvas bounds = 0, 33, 400, 334.". My applet is in a 400 by 400 space on the web page so 400 - 33 - 33 = 334, the full height minus the NORTH and SOUTH panels.
Now I'm looking for why Canvas is allocating space for a title bar and how I can turn that "feature" off.
Thanks for you help. Any additional insights would be helpful.