I had authentication errors on many of the sites in IIS for some reason. The app identity account wouldn't not work when testing the sites, but putting in the same information as the app identity manually, would allow for a successful test. I finally started completely over, starting fresh with HF3, and PXE works now.
I hate giving up on it like that but I have been having issues for too long now and just want to move forward.
Thanks again for your help.