This application is already hosted on Oracle's older 10g server where it's running fine. When I posted it to 11g I got the exception:

org.hibernate.MappingException: Resource: hibernate.cfg.xml not found

I found the tmp directory where the weblogic exploded the ear file and there was no classes directory under web-inf. There is a classes directory inside the .war file that's packaged with the ear. I posted a non-hibernate app to the same Weblogic server and it's running fine without a "classes" directory in tmp, and yes, there's a classes directory under web-inf in the war.

Can one of you Weblogic veterans tell me how to get xml files posted under web-inf/classes "included" in Weblogics classpath environment?

Was there a classes directory in the original war file?

Yes, I double checked to make sure.