SO I GOT AN ANSWER
Spoke to a very nice girl in tech support. Laid out the deal from the start, explained I already reimaged my phone, others have the same problem, etc. She told me that many people have called with the issue. Then she put me on hold for about 3 minutes while she did some research.
When she came back she said the latest word is that its an issue with Google's versions of their framework that they used in the update. I got the impression that the version of 2.3.4 that VZ customers were issued is not the same one that other R800 users got (as in it was custom made by VZ with Sony framework, probably why it doesn't have xLoud). She said that their engineers cannot fix it but they have been in touch with Google to try and find a solution. She could not give me any sort of ETA and apologized for the issue.
Thats prettymuch where I left it as the answer made sense and no reason to argue there. So they know about the issue, they are willing to fix it (if you believe them) but in theory they need Google to fix it. I can't believe no one tested this before releasing it, but then again it is Big Red.
I think KeiranFTW already mentioned that was the problem to! Pretty silly if it really wasn't fully tested, Verizon is slacking, I've always said their more concerned about spellings phones and making money then they are about giving updates. This only furthers proves it and, well, at least their attempting to handle it! Thanks for sharing!
Sent from my R800x