I think we got it figured out. I researched that init.xy error and found another ticket that talked about websites being blocked. I did not realize that the tarball still made calls out for files for the update. Sure enough, I found websites blocked. I added those sites to our whitelist, and tried it again and it worked perfect. I guess sometimes you just got to throw your hands up in the air and reset!
Thank you for your help throughout this long drawn out process.