I'm in the process writing an application that needs to receive data
    via an RS-232 connection, but needs to do other work between
    receptions.  Is it okay for me to drop the CTS line while it's not
    watching for incoming data?

I think it should be OK.  We certainly had plenty of buffering bugs when a
hung-up modem would drop CTS on otherwise idle lines, and stuff would get
stuck in the UARTS, interfering with all sorts of other desired behaviors.


    If so, when I raise the CTS, how long do I need to wait for pending
    data to be sent (if the sending UART already has the data queued by
    the PC)?

Soon.  Exact times will be uart dependent...


    Will "working" the CTS line like this create too much noise or have any
    other side effects? [potential 10us or so duty cycle.]

Um, this could be a problem.  The line IS rs232, so it can't get toggeled
any faster than rs232 specifies.  10uS is your 100kbps bit rate, right?
That's pretty fast for rs232.  Note that some vendors cheat and assume that
the "modem" signals don't need the same higher speed drivers and design
care that are on Rx/Tx...

This is the sort of application that (true) half duplex solves.  When the
sender is ready to transmit, it raises "request to send" (imagine that!),
and when the receiver is ready to receive (thereafter) it raises "clear to
send."  That way you can avoid toggling CTS, and only raise it when you
really need to receive data.  I don't recall whether the PC uarts have a
half-duplex mode (and it's irrrelevant unless you have control over the
sending software.)

BillW