I used the ACS712 but without the op amp. I read the signal output from the pin 7 directly with the Arduino Ax input. It will read negative +/- 5 amps. But also you can get it for 20 and 30 amps. The output normally read VCC/2 without any input. That will allow the sensor to read negative and positive current. If you read the customer reviews for your sensor you can see some are experiencing same problems as you having. There are some cheaps ACS712 sensor modules that does not use the op amp. Also you can buy one in Sparkfun that does not have the op amp. "SparkFun Hall-Effect Current Sensor Breakout - ACS712".
You can do a test by reading the voltage output pin 7 and it should read VCC/2. If it does then it maybe the setting of the gain and the offset adjustment.
Thanks. Since I'm running my arduino on 5v (with a 7.2volt battery using the onboard regulator) than I should be getting 2.5v readings with nothing connected?
RawValue = analogRead(analogIn);
Voltage = (RawValue / 1024.0) * 5000; // Gets you mV