I've been told that no one from Utah or published in Utah can break into the national Christian market, regardless of religious afiliation or genre. Is this true?
That's pretty much been my experience. You may find a few bookstores willing to carry you outside of Utah, but it's going to be difficult.
Years ago I represented an author who had a wonderful, non-LDS, Christian oriented book for families. Latter-day Saints wouldn't buy it because it was general Christian. Christians wouldn't buy it because it was from Utah.
The author self-published, changing the title and pen name, but left the content exactly the same. They got a PO Box in a Bible belt state, and sold the book online. It did well enough that it was eventually picked up by a Christian publisher. I don't think the publisher ever knew they were dealing with an LDS Utah resident.
As far as I know, it's still the same. Readers? What has been your experience? No speculation. We want first-hand experiences.