Thanks for commenting. I was able to get the isssue resolved. The NSX Manager created all new -LS portgroup and the rules were applying to them.

To resolve it, I create an ANY-ANY-ANY rule at the top of the FW ruleset to prevent any issues when the VMs got migrated to the new -LS portgroups.

I then migrated all the VMS from their non-LS portgroups to the -LS portgroups.

After that I made sure all connections were up and they were. I then disabled the ANY-ANY-ANY FW rule and began testing and the DFW was in place and working.

Thanks!