It seems that I might have located a possible bug or conflict with the PKGDIR environment variable. According to pkg_add(1), the PKGDIR variable is used to tell pkg_add where to place downloaded packages when the -K option is used. I have it set to /usr/ports/packages. However, with this variable set, and if one does a make package or make install on a port, it will fail saying that the pkg-descr file cannot be found. If I unset PKGDIR, then it works normally.