I found my solution.
2 problems.
1) my path was wrong. It should be only the filename in the /etc/aliases file like:
user: "|filename".
2) Also, I had the symlink in the wrong directory. Which I found out was not the /usr/adm/sm.bin that is prescribed for smrsh. Do a man on smrsh for details. Mine is /usr/localcw/bin.
# cd /usr/adm/sm.bin ##or /usr/localcw/bin in my case.
# ln -s /your/script/here . ## yes that is a period to put the link here in the current directory.
After that make sure the file that you are parsing is at least 555 for sendmail to process it. I had mine set to 700 which gave me errors.
Thanks for all the input. I hope this helps someelse in the future!