Well, I have concluded that there is no way to use a conditional inside the matrix/playa code, which is a big disappointment. I even tried the trick with the variable prefix, and it didn't work.

here is my template: Note that I can't get ANY type of conditional statement to work where indicated in the comment, but the 2 conditionals outside the EE channel tag DO work.

<!-- news promos using Matrix & Playa fields -->
{exp:channel:entries channel="home_page" disable="categories|category_fields|member_data|pagination" limit="1" dynamic="off" show_future_entries="yes"}
            <!-- start matrix field -->
            {homepage_news_4items}
                    {!-- start playa field within the matrix --}
                    {hp_news_promo}
                    <li>
                        <em>{entry_date format="%M. %j, %Y"}</em>
                        <div class="text">
                            <!-- need to insert an EE conditional statement on this line to replace the xxxxxxx --><a href="{path='/xxxxxxxx/{url_title}'}">{exp:word_limit total="7"}{news_long_title}{/exp:word_limit}</a>
                        </div>
                    </li>
                    {/hp_news_promo}
                    {!-- end playa field within the matrix --}
            {/homepage_news_4items}
            <!-- end matrix field -->
{/exp:channel:entries}
<!-- /news promos using Matrix & Playa fields -->

{if username == 'rory'}Hi Rory!{/if}

{if segment_2 == 'march14test'}this is the test template{if:else}wrong URL{/if}

----- END TEMPLATE

Here's what I want to insert as a conditional on the line indicated (to replace the whole line):

{if channel_short_name == "industry_news"}{if:else}{/if}{exp:word_limit total="7"}{news_long_title}{/exp:word_limit}