I fixed my problem. I do not know if this begins in the middle or the end but here it goes.
1. Close Outlook on PC (Mine is 2010)
2. Open icloud - on PC (this should prompt you to set up the two set verification I think - somewhere along the line I did set this up either through my phone or in icloud on my PC).
3. Uncheck all boxes - then re check Contacts, Calendars, and tasks. At this point icloud re-synced with my Outlook 2010.
4. re boot computer.
5. open outlook on pc - My old calendar (outlook data file) was blank but a new box 'Calendar - icloud' was there.
6. On your phone - Settings - Calendar - Accounts. I have both icloud and outlook checked.
7. On your phone - Settings - Calendar - Default Calendar. Make sure icloud is checked.
8. On your phone - Calendar App - Calendars . Make sure icloud is checked (all of mine are checked)
9. ITunes - on PC - Sync. Here, the settings had changed 'to over the air' - and both my phone and outlook on the PC had updated after the sync.
I do not know if the calendar now updates only with iTunes sync or if it is via 'push' from icloud.
I also do not know if you need icloud open and running on the PC for the updates to work...