Can inderal (propranolol) suddenly cause confusion (following infection) in an elderly patient who's been taking it for years?

Yes, it is a problem: Inderal (propranolol) is a nasty drug especially in the elderly. Side effects include confusion, depression, fatigue, exercise intolerance, low blood pressure, asthma, etc. The elderly have very poor tolerance, and if underlying brain changes, the infection can bring out problems, but the Inderal (propranolol) will make it worse. Get a new medication.

Unlikely: It is more likely that the confusion was caused by the infection, not by the medication.