After reading the documentation a few times and trial and error I found that word was caching in the registry. I followed the instructions and rebuilt my project and it seems to have worked.
http://www.webdavsystem.com/server/documentation/ms_office_read_only
Clear Microsoft Office WebDAV cache in registry. Microsoft Office reads WebDAV server options when connecting to server first time and stores them for later use. If your server settings has changed during development (or you just fixed some server issues) you may need to delete this settings. The Microsoft Office WebDAV cache is stored under the key:
HKEY_CURRENT_USER\Software\Microsoft\Office\\Common\Internet\Server Cache\
To clear cache just delete all keys under this key. In a development environment we suggest always clearing the cache if your WebDAV server class has changed or after authentication scheme has changed. As an alternative to deleting cache, you can just reconfigure your server to run on a different port.
Note that in production environment usually you do not need to clear this cache or change port as soon as you server settings do not change often while Microsoft Office will re-request server options after some time.