Thanks Mathias!
I found the issue. the setchosen[] process apparently requires a trusted script. This is my final script in case anyone else wants to do similar...
Code:
<!-- If the ability needs a specific selection, set it based on the Target1.? tags -->
<eval index="4" phase="Final" priority="1000"><![CDATA[
trustme
~ done if this doesn't have a Target1 tag
doneif (tagcount[Target1.?] <> 1)
~ if we do have a single Target1 tag, we need to set the usrChosen1 to the target
var myRef as string
var tagexpr as string
myRef = tagids[Target1.?,"|"]
myRef = replace(myRef,"Target1","Reference1",0)
perform this.field[usrChosen1].setchosen[Ability,myRef,hero]
]]></eval>