You would be 100% correct I think. I have included the steps that we followed below in case anyone else has this problem. Some of them might be unnecessary, but this is what we did to get it to work.
1) Deleted everything from out previous attempts on that server.
2) Created a new directory for our files, and triple checked to make sure the Network Service account (windows 2003) had full control, and copied our contents/modificiations into that folder.
3) Created a new website with a new IP.
4) Verfied that the PortalAlias table referenced the IP address only (no DNS yet. This was causing us problems with the ISA server on the network we believe, or an incorrect DNS entry.)
5) Tested, and everything looked good!
6) Created an A record in DNS for internal use, modificed the PortalAlias table yet again, and tested. Everything looked good!
If you are going to create 2 like I mention in the post, we stopped the working version of the DNN installation through IIS, just to be sure, and then repeated the steps. Again... I am sure there are a lot of unnecessary steps up there, but that is how we got it to work. Thanks Crispy for your assitance!