Ok so the update in the first post works.
http://www.microsoft.com/windowsmobi...gs-update.mspx
Here is the direct link to the Dec update:
http://support.microsoft.com/kb/958729/
the link posted by mogulman01 is for the march 2008 update which has been updated to the dec 2008 updated as linked in this post.
Before you sync you contacts, install the update via cab file then sync and the birthdays show up fine in manila.
Correction:
the birthdays outside of DST have been synced correctly but the ones within DST still are off. what a mess.