Have I made an error somewhere in that the program seems to be reducing my mandatory ira distribution by my full non-deduct basis rather than by a small percentage?

This suggests that you failed to click the Continue button on the Your 1099-R Entries page and did not enter your year-end balance in traditional IRAs as TurboTax would have asked you to do.  By not entering this amount, TurboTax leaves Form 8606 line 6 blank, throwing off the calculation on that part of the form.