I figured out a work around which finally allowed iTunes to accept the MobileMe family sub-accounts. These are the steps I took.
1. Log into MobileMe
https://auth.me.com/ using the main MobileMe address.
2. Delete each sub-account in MobileMe.
3. When setting up the same sub-account in MobileMe ensure to choose the option to recover the email address. DOB is to be the DOB of each user, not the main account user.
4. Sign in each user sub-account in iTunes. When it ask you to review enter the credentials of each user (DOB, App Store gift card or credit card, billing address, telephone number).
5. You should see a confirmation page displayed in iTunes indicating the sub-account is now registered in iTunes.
The error I previously had seen in iTunes appears to only impact sub-accounts in the MobileMe family pack. iTunes and MobileMe are not communicating the information properly to each other causing the error "Your request is temporarily unable to be processed, Please try again later". This is seen when clicking confirm on the billing page in iTunes when it ask the user to review their information after signing into iTunes. Previous to deleting the sub-accounts in MobileMe then recovering them I would get this error in iTunes no matter if I used the user credentials or my own.