Nevermind, found the answer after a little more searching.

The /etc/X11/Xsession.d/45xsession file, at line 128 does NOT copy your /etc/skel to your home directory... it copies /etc/skel/.kde* and /etc/skel/Desktop and ignores everything else.

Thats a pain in the ass little thing there.

Fixed it though. Just changed the line to rsync the whole directory.