We use the B3LYP density functional theory with a large basis set to characterize stationary points on both triplet and singlet potential energy surfaces for the gas-phase reaction Zr + C2H4 --> ZrC2H2 + H-2. The previously described stepwise rearrangement path occurs on the triplet surface, requiring passage over a substantial exit channel barrier. A new, lower energy triplet path involves concerted rearrangement of the HZrC2H3 insertion intermediate directly to a weakly bound, product-like complex with no exit channel barrier to triplet products. A new low-energy singlet path involves stepwise rearrangement from HZrC2H3 to the strongly bound dihydrido species H2ZrC2H2, which then dissociates to singlet products over a small exit channel barrier of 4 kcal/mol. We argue that the singlet path is more consistent than either triplet path with the experimental product kinetic energy distribution, which peaks at 3-5 kcal/mol. This in turn suggests that access of the singlet surface via fast intersystem crossing from the triplet to singlet metallacyclopropane complex competes effectively, perhaps dominating at low collision energy. As in earlier work, B3LYP places key transition state energies too high by 6-9 kcal/mol. The mPW1PW91 density functional gives much more realistic energies.