After about 3 weeks and many calls with Verizon technical support we finally got to the bottom of being unable to connect via a VPN on USB Verizon wireless cards (an older PCMCIA card was still working fine).
It turns out that the IP Code was set to general – which is normally placed on residential air cards to restrict ip traffic. The tech removed this “feature” and we confirmed vpn worked again.
So, if you are having this problem, contact Verizon Technical support and ask them to remove General IP code from the phone. If the Tier1 support person doesn’t know what you are talking about, request they instant message level 3 support who will know what you are talking about.
Good luck and I hope this prevents 3 weeks of VPN failure for other people.
Thanks to Eric for persevering and finally getting an answer