After using a stock Nexus 7 for a bit, it was time to root the device. Unlocking and rooting went as expected, but ClockworkMod Recovery (6.0.1.0) was having problems launching from the bootloader menu via the recovery option. Some investigation found that this is a known issue on the Nexus 7 and there are workarounds.

The first workaround tried was to rename recovery-from-boot.p to recovery-from-boot.bak as described here but that didn't seem to do the trick so the search continued.

What was throwing me was that the first entering recovery via the bootloader, everything worked as expected. However, after rebooting into Android and then attempting to launch recovery the device hangs. A few Google searches later found this thread which matched what was occurring on my device. It sounds like a fix is being developed, but in the meantime there are three options to workaround the issue for the time being:

1. Launch recovery via 'adb reboot recovery' when connected via USB.
2. Launch recovery via 'reboot recovery' on the device using a terminal emulator like ConnectBot
3. After rooting, restore the stock recovery image for the time being

I don't expect this workaround to be required for long but for now, it's what works.

Update: this problem appears to have been resolved in Android 4.1.2.