Hello mpayne0!
Thank you for your reply. Forunately, I posted this issue in Cubase 7 and someone mentioned ASIO Guard having issues. They recommended disabling it per track, however that didnt work. I had to disable ASIO Guard globally, then all played well. 
So, ASIO Guard was actually causing the dropout, when its supposed to protect from droppouts…silly, but I digress.
Anyway, thanks for trying to help! I forgot I had this thread open, otherwise I would have closed/deleted it.
-Joseph