Try pasting it into the GREP tab of Find/Change. If that doesn't work directly, then replace thatever it comes up with with a single period (.). That may mean replacing two characters with one. A period will match any character.
If you put a space on the line between two fields, the line is not blank (rookie mistake I've made myself), it has a space in it. Notice that there's a space in your pasted "find what" text.
As far as I know, Find/Change doesn't see the field marker characters. Try a grep search for ^\s$ and replace with nothing.
Thanks for the tips, but neither quite worked.
I eventually figured that since the ^I could't be seen, I should just give up on trying to find those instances -- and concentrate on finding and replacing what it could find.
A find and replace search for a space followed by two paragraph returns (to be replaced by a single return) worked perfectly.
All the ^I characters are still there (seen as red colon marks when the show hidden character feature is engaged), but as they literally take up zero space, I'm ignoring them.
Bottom line: ignore the ^I character when finding and replacing text