After further digging, it appears that we are running into an know bug in java 7 update 25.
More info can be seen in these threads:
Only a few of the machines have been updated to java 7 update 25, that is why not everyone would see it.
Most of us are still on java 7 update 21. Also, the problem ONLY occurs when the application is launched via JNLP.
When the app is launched view command line or IDE, everything works fine.
In a nutshell, update 25 broke how the AppContext is maintained. Instead of there being only 1, there are now several.
We have tried the workarounds listed in the bug and threads ( launch console with app, set the class loader in the
EventQueue, etc ... ) but none of them worked for us. We are going to uninstall update 25 and reload update 21 on
the problem machines.
Good luck to anyone else that sees this. Hopefully Oracle will fix this soon.