I'm still very new to Inkscape so I may be missing something obvious here. 

I have objects in seven layers. One of the layers contains a circle ( it's still an object it's not a path ) that I want to be the boundary of the final image which will be PNG. I want to be able to apply a filter or an action that captures everything in all layers that falls within the boundary of the circle. 

Is there a way to achieve that?

You can group all the objects and use a circle object to "clip" the group, hiding everything outside the circle. This is non-destructive, so the design can be changed at will.

http://tavmjong.free.fr/INKSCAPE/MANUAL/html/Clip.html

thanks for offering that suggestion. I can get it to work when both objects are in the same layer but I can't get it to work when objects are in different layers.

I'd try making a new top layer, then making the existing layers into sub-layers of the top layer (via drag & drop).

The sub-layers can then be converted to groups in the Objects dialog's T column, grouped and clipped.

OK, that's great. 

I've moved the layers and created a clip group. I'm not confident about this because I think that I applied that command at the layer level and on the path. I don't know where to check to verify the settings. I can see that the two layers without the layer group are invisible within the path.

Now I want to reverse that so the interior is visible and objects outside are invisible. 

I also have a new issue that has arisen. The third layer ( the selected layer in the image ) will not drag-n-drop into the layer group. I've tried multiple times but it doesn't shift. 

While doing this I discovered that I can select multiple layers in the Objects dialog but I cannot select multiple layer in the Layers dialog. Is that a candidate for a bug report? or a feature request?

Drag & drop in the Objects dialog has been sketchy in the past. I'd use the layers dialog for that.

Selecting multiple layers would be a request, but the Objects dialog may obsolesce the Layers dialog in the future anyway.