I listed the hardware at the top of the post, albeit without links.
Since the code worked perfectly after an upload, their is no reason to suspect the code either. Removing the XBEE chip from the shield and powering up the device results in a perfectly functioning device. How would you not narrow that down to the XBEE???????
Regardless, I found that with the two different XBEE shields I have, they result in the same issue and both use the standard arduino rx(D0) and TX(D1). After doing some research online, I found some folks were reporting similar issues. (LED 13 doing 3 intermittent flashes upon power) That means that the arduino is not booting, and is stuck at the reading serial portion since it thinks it may be having data uploaded to it. Basically there is garbage from the xbee on those pins resulting in a hung boot.
So, I have resolved the issue. I had pins D11 and D12 open, so I cut the traces on the xbee shield from pin 2(DIN) on the xbee header and soldered a wire to D11 on the header, and did the same with XBEE pin 3(Dout) to D12 of the header.
Then I just added the softwareserial.h library for the virtual serial port and changed all of my serial.print to myserial.print.
Bam!! Everything works perfectly on power cycles, and now I don't have to flip the switch or move the jumpers back and forth from usb/xbee on the shield.
I figured I would post this in case anyone else ran into the same issue. You can pick any two pins you like for the virtual serial port. The arduino IDE for the software serial example uses pins D2, and D3.