I found the correct way to ignore the variables. What tripped me was trying to ignore the same variables twice, in the multiple value bind and at the top of the function. Sorry for the confusion.
(defun draw-objects (w h) ; view
;; trying to ignore xb and yb here as well was the source of confusion
(format t ">>>>>>>> in draw-objects ~S " cairo:*context*)
(let ((cnt (format nil "~S" *selection*))
(tw 0)
(th 0)
(tpx 0)
(tpy 0))
(cairo:set-source-rgb 0 0 0)
(cairo:select-font-face "Ubuntu Mono" :normal :bold)
(cairo:set-font-size 20)