org.hibernate.HibernateException: Unable to locate current JTA transaction

It started with a "org.hibernate.HibernateException: Could not find datasource" which was resolved by moving the hibernate-cfg.xml to the root folder (above WEB-INF). Once this was resolved my servlet returned a "Unable to locate current JTA transaction" transaction error. The postgres datasource configured via JBoss indicated status DOWN.

Error text:

org.hibernate.context.JTASessionContext.currentSession(JTASessionContext.java:88)
org.hibernate.impl.SessionFactoryImpl.getCurrentSession(SessionFactoryImpl.java:621)

occurs when getSessionFactory is attempted. Direct connection to db (w/o JBoss DS) works fine.