Edit: Actually I remember now I updated freeTDS to 0.91 and compiled them by hand and that's what seemed to have fixed my issue along with making sure I had the correct tds version for my version of MSSQL. Seems that for 2008 you should have 8.0 as the selected version. This doesn't seem documented anywhere on the freetds page though.
I have no idea what I did but everything is working now after fighting with this for two days. all I did was open my config files up again (freetds.conf, odbcinst.ini, odbc.ini) do a save and then close them. Not like I haven't done that a million times trying to solve my issue but after that everything is working now perfectly now. I can even do select * which I wasn't able to do before when isql worked on the first query but not subsequent ones.