Feeling pretty silly tonight, but there is a huge level of satisfaction knowing I finally figured it all out.
Thank you to everyone for the advice!

Ok, so here's what the problems were:

1. Cross Section two was off by about a quarter of an inch on each side. Not significant, but enough to make me do it over again. After all a quarter of an inch added up is a half an inch.. yep, gotta do it over.

2. Cross Section one... I had a feeling it wasnt right... after checking my offsets 3 times to make absolute sure I had them right, I pulled the cross section down off the station and found that the chine inset or chine notch was measured in below the offset point, instead of above the offset point, placing it off by atleast 3/4 of an inch!
YEEEESSSSSSS!!!! That was the overall problem ... or atleast the two sections combined were enough to throw the whole thing way off.

*enter big sigh here*

I can sleep tonight~!!~!!!!!~!!!~!!!

Once again, I am thanking you all for your time and contribution to my solutions.
I am so excited to move forward with this project tomorrow.
Hoping to be skinning this kayak within the week!

Big Smiles, ~Heather

PS, Just curious, am I the only one that finds themselves sitting and staring at the frame for hours, admiring the beauty of it all?
Dang, this is addicting~! Gotta love it!

: Ok, Ive spent about a monumental amount of time on this one problem
: and I need help.
: So, I took a video of what I am up against and you can see it at
: this link:
: http://www.youtube.com/watch?v=VCu7T25vqx0