Ok so some improvement.
I took pieces from the sample and incorporated into my sample application. I narrowed it down to some difference in the loggingConfiguration section in the web.config but I physically could not see the difference between the bad one and the good one. It was almost like there was a hidden character (even after using file compares I couldn't identify the wacky character causing the configuration to not work. Kills me).
In the end I could not find the difference and I started using the good copy of the loggingConfiguration section. So this seems to have been resolved.
thanks