I was able to resolve the issue by creating a new x.509 certificate and uploading it to Azure ACS as my primary X.509 certificate and then installing it on my local machine's credential store.
I followed these instructions to create the certificate:
http://blogs.msdn.com/b/cclayton/archive/2012/03/21/windows-azure-and-x509-certificates.aspx
I used the makecert command to generate the certificate (make sure to add your own namespace)
makecert.exe -r -pe -a sha1 -n "CN=YOURNAMESPACE.accesscontrol.windows.net" -ss My -sr CurrentUser -len 2048 -sky exchange -sy 24
I then exported the certificate as both a PFX and CER file, using certmgr.mcs.
I imported the PFX file into my Azure ACS (using the management portal). Once this was completed I copied the new thumbnail and pasted it over the old value in my web.config file
Finally, I installed the CER file into my certificate store as documented in this blog post:
The text of interest in the above blog post is the following text:
.CER. Double-click on the file, hit the “Install Certificate…” button, choose Local Machine, Trusted People, and you’re in business.
Everything now works. Hope this works for you too. IF you need more help just ask and I will try to point in you in the right direction