Thanks for the help. I found out my problem. When I first created the dat file (from the mame binary) when I was asked to include the software lists I choose yes and was having the above mentioned problem. I deleted that profile and started over this time choosing no for software lists and it seems to work.
So this begs the question how can I get a scan to work when including the software lists. I am following your directions above exactly and have not disabled anything but when software lists are included I can't get a scan to work. When they are not included it scans fine.