After starting iSCSI Failover on secondary node this node goes automatically to active mode (it means that VIP is available at this moment on both nodes). This sitution happens when your auxiliary connections between nodes are broken. Before starting iSCSI Failover service on secondary node please ping all IP addresses used in iSCSI Failover on Primary node in order to check connectivity between nodes (this step please do under console CTRL+ALT+T on secondary node).
Was working with support and we decided to try redoing the replication. The secondary DSS was acting very weird to the point I decided to just blow away the secondary and start with a fresh install. Its replicating correctly now and I'm averaging about 40 MB/sec.
What I should have done before shutting down the secondary was click the stop button under replication. I think that the secondary got very confused as a result.
Bad thing is if your doing autofailover your primary stop advertising its virtual IP because the volumes are not in sync. I am in the process of redoing my servers so don't have any production yet. If this was a production situation you would have to change your actual primary DSS ip to what the virtual one was temprorarily until you fixed the secondary.