KDE 3.3: gpg-agent broken, can't sign emails. How to fix?

[Doug Holland <meldroc@frii.com>]

Upon upgrading to KDE 3.3, I'm greeted with the following message:

The use of GnuPG Agent is enabled in GnuPG's configuration file 
(/home/meldroc/.gnupg/gpg.conf).
However, the agent doesn't seem to run. This could result in problems with 
signing/decryption.
Please disable GnuPG Agent from KGpg settings, or fix the agent.

Of course, now gnupg signing and encrypting of messages doesn't work because 
it can't get passphrases using pinentry.

How do I fix this?

Doug