Ok it ended up being some sort of logic error as suspected. The digital pin I was plugging in to must have had 2V logic because that was what was reading on the multimeter. I changed it to a different digital pin and it works fine now. Never knew the AVR had so many different logic levels...
Have you configured port D or any of the pins in there differently? It should do 5V.
No I didn't configure anything differently-- I wonder if the Arduino bootloader does this automatically perhaps? The pin I was using (13) is used in all the Arduino tutorials to turn LEDs on and off. 5V would normally kill a small LED correct? Maybe's thats why this particular pin is only outputting 2V or so.
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