Thanks Guys,
@Godsbest
Thanks for showing me how to use console.log(), that helped. I was always using alerts before, much easier.
@Jake
Your replication was very beneficial in helping me narrow down the problem. I decided to repeat your example and was successful which pointed me towards the fact my web service was not correct.
I was focused on looking at what the debugger showed i was returning so much, that i overlooked the fact that my script method was set to JSON instead of XML. I probably should just be doing JSON, but this example with XML just looked so easily understandable to customize for my needs that it enticed me.
Anyways, i changed it to this and it worked.
<ScriptMethod(ResponseFormat:=ResponseFormat.Xml)> _
Thank you all for the help.