Help With Distributed Processing in Compressor 3.5.3

I've read most of the important articles on how to set up distributed processing. I've changed the network settings so the controllers is on 1.1.1.1 and the node is 1.1.1.2. I've created a managed cluster and I'm able to add the service node to the cluster.

I have a two computer setup. Both running 10.8.5, and the exact same versions of Studio.

When I submit my transcode in compressor, batch monitor opens up and begins the distributed processing and this is where my problem begins. The segments that appear to be sent the node do not make it past "processing". The segments sent to the controller make it to "processing: transcoding" and the remaining time counts down for that segment..

The log has this to say about the service node:

<service type="servicecontroller:com.apple.stomp.transcoder" displayName="iMac 2" address="tcp://1.1.1.2:49171" hostName="iMac-2.local">

<logs tms="417230330.657" tmt="03/22/2014 18:18:50.657" pnm="CompressorTranscoderX">

<log tms="417230330.657" tmt="03/22/2014 18:18:50.657" pid="244" kind="mrk" sub="error" what="get-log" avail="false" msg="Not logging to file."/>

</logs>

</service>

Does anyone have a fix for this?