After 9 hours I finally figured it out, and hopefully nobody will have to repeat the troubleshooting I just did. The problem is described here.
This will give you "Security violation warnings"
On page 51 of the KML 2.1 reference doc at the bottom of the page... its states that
"the file containing the "NetworkLinkControl" must have been loaded by a network link. This is a key point.
Therefore create a separate update network link which points to your "Network_link_control" file.
Don't try and click on a link or load that file into Google Earth independently othwise you get the security violation warning. Its a very important mechanism which can get over looked very easily if your breezing over the docs!!!
Creating a local NetworkLink didn't work for me either, I had to upload my NetworkLinkControl.kml to the internet in order for it to run. Even with error reporting turned on, I never got a message that indicated I had a security violation, until I tried to run NetworkLinkControl via a local network link.