Solved my issue.
I missed the part about port 587. In order to have email signed you need to change the outbound port from 25(default) to 587. In Outlook I went to my account properties Advanced Tab. (for each account). I now that it can be a hassel to have all you clients change this in outlook, but domainkeys cannot sign and verify on the same port. In Webmail I changed the smtp.class.php and phpmailer.class.php to use port 587 instead of 25. This important if your users will be using your server side email programs such as talaen or squirrelmail. My classes for talaen were in /webmail/inc/.
Although I recently changed from dkfilter to DKIM and still holds true for DKIM.