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Ask CJ: opportunities for an experienced M.S.-level chemist?

From the inbox, a good question (lightly redacted for privacy) from someone we'll call LS: 

I have a [master's] in organic chemistry, and I am currently employed as a R&D chemist doing organic synthesis, and I like what I do.  However, [redacted] lead me to believe that it is time to look for something new.  Considering how much time and effort it took to find this job, I was wondering if anyone else has experience with job searches and employment with a [master's] degree. 

Specifically, how do you deal with the fact that you are a “failed PhD” on a resume and during interviews?  What kinds of companies (size, industry, location) will and will not hire you?  What career options are open to someone with a [master's] degree?  Are there any roadblocks that you hit during your career, and how do you overcome them?  Is it feasible to remain a synthetic chemist throughout your career?  

I don't really have a huge amount of experience with this question, other than a couple of thoughts. First, I don't think that anyone really cares whether or not you're a "failed Ph.D." (which is a premise that I fundamentally reject) after a couple of years in industry. Once you have a year or two of the fabled "industrial experience", I think employers are much more interested in what you have done in industry (and what you could do) rather than the details of how you left school.

I suspect the biggest roadblocks for M.S. chemists are for management on the research side. It is there that you will have the stiffest competition from Ph.D.s.

Readers, there's a lot more questions from LS - any ideas? 

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