Can not make network user accounts

After upgrading from 10.6.8 Server to 10.8 and installing server tools, I can not make network user accounts. All of my old network user accounts migrated to the new OS and work properly, I just can not seem to make new accounts under 10.8.

Under 10.6.8 I would log into Workgroup Manager as diradmin and I could pretty easily make new users.

Under 10.8.2 I launch the server app and click on "users". The addition (+) symbol in greed out for making new users. I can make local users via System Preferences, but I can not see any way to change local users to network users via either System Preferences or the Server app.

I have logged into the server app using a local administrator account, the diradmin account, and the root account. None of the accounts allow access to create new network users (addition symbol is greed out).

Is there a trick to making network users in 10.8 that I am missing?

(as an aside, I have noticed I can log into Directory Utility as diradmin and can view the node with all my network accounts. It seems like I might be able to manually create a user account this way, but I'm not quite sure how to make the user record)