First, thanks everyone for your helpful and insightful answers. I have learned a lot from this thread. That's always fun!
I believe I was mistaken, and that the derating is indeed taken from the ampacity table in it's original form. The NEC says this:
240.4(D) Small Conductors. Unless specifically permitted in
240.4(E) through (G), the overcurrent protection shall not
exceed the following after any correction factors for ambient
temperature and number of conductors have been applied.
The required amperage over protection (15 amps in this instance) is calculated AFTER derating for temperature and number of conductors.
One other thing I found is:
110.14 (C) Temperature Limitations. The temperature rating associated
with the ampacity of a conductor shall be selected
and coordinated so as not to exceed the lowest temperature
rating of any connected termination, conductor, or device.
Conductors with temperature ratings higher than specified
for terminations shall be permitted to be used for ampacity
adjustment, correction, or both.
This indicates to me that if you have a mixed system, with some conductors/terminals rated at 60 degrees C, and others at 90 degree C, then you derate from the lowest temperature conductor/terminal in the circuit. In this instance, 14AWG wire at 60 degree C would still work, in that it is rated 20A and a 80% derating would still put it at 16A, within the range of the breaker's coverage.
Thanks for the interesting discussion. This has been one of my favorite threads in awhile.
Oh, I found out Kentucky is still on the 2005 NEC and that local jurisdictions have to use it, as it is a state-wide regulation.