After working on it for another 4 hours this morning I believe it is a hardware issue. The old directx headers is part of directx 8 and is deprecated and obviously not well supported by this hardware. After trying everything including using a vista 64 bit driver from 2006 I ended up disabling onboard sound and plugging in a USB soundblaster play. Everything is working well. Now I have to tell our franchisee that he has to buy 8 USB sound cards to work around this issue