Instant Personal Hotspot Broken in iOS 8.1 and or Yosemite 14A389

I can connect to the Personal Hotspot on my iPhone 6 Plus running 8.1 from any device without any problem except from my Macbook Pro running Yosemite via the Instant Personal Hotpot feature.  Everything else works fine, including Handoff between the phone and the Macbook.
So I did an experiment.  I tried to connect to the iPhone's hotspot via "Join Other Network" under the WiFi menu in Yosemite.  After manually entering the name and password, voila, I'm connected.  So, obviously it's Instant Personal Hotspot that's broken.  And the frustrating thing is, as long as my phone and Macbook are signed in with the same iCloud account, I can't even let Yosemite connect to the phone as a regular hotspot.  I'll have to do the manual connection every time!
This is just one of the many many annoyances as late with Apple products.  Things really don't "just work" any more!  Sigh!

Your solution worked for me while I was at the Apple Genius Bar in Houston today, and it survived one restart. Since Apple's guys in Houston did not know how to fix this issue, I shared your post with them. 
As for your problem coming back, during my Genius bar session, the genius said I should be able to connect to my hotspot without having it turned on on the iPhone itself.  I didn't know that (I always left hotspot on).  So, we tried it.  It was at that point that the problem resurfaced.  So, this time, instead of deleting my iCloud account on my iPhone, I just deleted the wifi entry in the Network settings for wifi.  That worked.  So, my question is whether you leave your hotspot setting on at all times or not.  I'm assuming you do, if you use it that much, but thought I would mention it anyway.
I'll repost if my problem resurfaces.

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