to be honest moogleman, the only way i can picture dihedral having anything to do with it, is that in a turn the down going wing will effectively have a slightly longer span, thus producing more lift ... but since this is not mentioned in any of the texts it probably has nothing to do with it. now the point you mentioned in your answer about the sideslip, i did draw it like you said, but still, the relative aiflow will be hitting the wing in a spanwise direction from tip to root, so why should it produce lift at all . . .
i know its not that important to understatnd this point, but its frustrating