If it helps, here is the verbose output from avrdude during the upload:
Binary sketch size: 2,528 bytes (of a 14,336 byte maximum)
C:\arduino\arduino-1.0.1\hardware/tools/avr/bin/avrdude -CC:\arduino\arduino-1.0.1\hardware/tools/avr/etc/avrdude.conf -v -v -v -v -patmega168 -carduino -P\\.\COM5 -b19200 -D -Uflash:w:C:\Users\djseebs\AppData\Local\Temp\build3898121089803696074.tmp\Serial_Test.cpp.hex:i
avrdude: Version 5.11, compiled on Sep 2 2011 at 19:38:36
Copyright (c) 2000-2005 Brian Dean, http://www.bdmicro.com/
Copyright (c) 2007-2009 Joerg Wunsch
System wide configuration file is "C:\arduino\arduino-1.0.1\hardware/tools/avr/etc/avrdude.conf"
Using Port : \\.\COM5
Using Programmer : arduino
Overriding Baud Rate : 19200
avrdude: Send: 0 [30] [20]
avrdude: Send: 0 [30] [20]
avrdude: Send: 0 [30] [20]
avrdude: Recv: ` [60]
avrdude: stk500_getsync(): not in sync: resp=0x60
avrdude done. Thank you.
I also performed the Loop Back Test (http://arduino.cc/forum/index.php/topic,73748.0.html) and it echoed every message back to me successfully.
I've also re-attempted performing manual resets during upload to no avail. I'm close to giving up here 