Finally getting back to this project...
Update: I have reinstalled php, re-created the website, re-setup permissions and checked over php.ini and having same problem.
Sirdude: I am running v5.3.1. What problems might I see using newer than 5.3? I will have to research mod_security but I do have folder security wide open for troubleshooting so I don't think that is an issue.
Ruben: Thanks for the link to that test file. It reported a mysql problem and I fixed it and it reports back all ok.
I think it is time to open a ticket.