The problem is that b2 invokes ar.exe and ranlib.exe in "/usr/x86_64-pc-cygwin/bin" rather than "c:/cygwin64/bin"
Compiles and shared builds work OK because user-config.jam has this entry:
using gcc : c++03 : c:/cygwin64/bin/g++ : <cxxflags>"-Wconversion" ;
As a work around, I've created a symlink from "c:/usr/x86_64-pc-cygwin/bin" to "c:/cygwin64/bin", and that works fine. But it would save a lot of aggravation if b2 just worked without the workaround. Incidentally, the msvc toolset does not have this problem.