Ok, here is what i did to fix my issue.
1 - I went into the HA/DRS cluster settings and changed the Admission Control to "Allow VMs to be powered on even if they violate availability constants"
2 - vMotioned the VMs over to the host in the cluster
3 - Dragged the second host into the cluster
4 - Changed my HA cluster setting back to "Prevent VMs from being powered on if they violate availability constraints"
Also - FYI: in my ESX 3.5 environment i just dragged the host into the HA/DRS cluster with the VMS powered on and they all stayed up with no issues. I would assume that you could do this in ESX4 as well with no issues.