To clarify the issue I am seeing using the above PDF linked by IamTHEvilONE.
On page 20 of the "VMware vCloud Director Resource Allocation Models" doc it shows an example of how the reservations on the VM level should be set under an allocation type pool. you will see the % configured on the OvDC settings is the exact % of resources that should be set on the VM level.
So real world example in my environment is if the OvDC is set to 50% reservation of the allocated RAM, a VM with 1024 MB (1 GB) should have a reservation of 512 MB.
This reservation is not occuring as the Document states should happen.
However, the the "vCloud Director Administrator's Guide" (link below) on page 34 makes no mention of the reservation setting on the VM level. Nor does Techstarts blog he links above.
http://pubs.vmware.com/vcd-51/topic/com.vmware.ICbase/PDF/vcd_51_admin_guide.pdf
Now, this means that there are two versions telling a different story about the allocation Pool allocation model. In the example of the admin guide and Techstarts blog my environment is configured and operating correctly. However under the "VMware vCloud Director Resource Allocation models" doc and previous versions of vCloud docs, along with several blogs, my environment would be operating incorrectly by not setting the reservation on the VM level.
I hope the admin guide and Techstarts blogs are correct as I can close a case I have open and nothing is wrong with my environment. That would be Great!
However, if the latter is correct, it appears Peter and I have hit a bug with potentially major side effects.