Through our VAR Capp Inc we were able to find a solution that worked. She found KB S-053652, which unfortunately does not appear to show up when I search.
What the issue was is a connection issue. EPDM was getting confused having two different domain controllers trying to tell it who can connect. The cure was we created a Local Domain Group on the domain where the Archive server is located. Then we added the users from the external domain onto this group. Then I needed to add the newly created group to the list of accepted domains for log in to the EPDM vault. And now all works flawlessly.
The key being EPDM needed to have the local server tell it who it was allowed to add, instead of being confused by two servers.
Attached is the screen showing the Place where you set who can log in which is only accessible fromt he Archive Server and the Archive Server Administration program. (You can goto options default settings, or right click on the Vault and go to properties).
Also attached is a picture of the KB article.