Well, some success, but not perfect. Here's some quick test results of the workflow I suggested:
While the process did produce distinct zones (yellow lines), there are issues in that it did not capture street area outside the extents (see pink streets on left side). Also, the zones did not cross exactly at the endpoints where two lines met that had different zone assignments.
In summary, I guess this workflow is sufficient to rough out the zones, but one would have to go back and manually edit the zone polygons to cross right at the street junctions and to extend the polygons if streets are not covered fully.
Chris Donohue, GISP