Hi Wizofoz,
I agree with your first two paragraphs, but disagree with the implications contained in your final one.
You are making light of the fact that, if the 70-knot headwind suddenly dies away, the inertia of your Tiger Moth (aaah, De Havilland!) will have to be overcome in order to increase its GS from zero to whatever it needs to restore a flyable IAS. If to do this it needs to regain its original TAS of 70kt, it will need to accelerate to a GS of 70kt.
If GS has to be changed, so must be the kinetic energy, which is also a vector and therefore relative to a datum (we normally use the earth's surface but, as you say, it could be anything). Increasing the kinetic energy involves the application of power for a period of time. [I'm aware that, in purist terms, "kinetic energy" is more of a concept than a reality; but it's one that works quite well enough for the purpose of this discussion.]
If your Tiger Moth was achieving a TAS of 70kt into a 140-kt headwind, its GS would be minus-70kt. If the wind suddenly dropped to 70kt, the Tiger would need to increase its GS from minus-70kt to zero. That would require a similar amount of [power x time] as in the first case. Power x time = energy. So the Tiger needs to increase its "kinetic energy".
Now: are you a bit happier?