here is a screen shot in Vcarve of the pass setup that I have.

here is a screen shot in Vcarve of the pass setup that I have. The machine is running two passes but does not drop down for the second pass. It stays at the same depth and completes the second pass.

I don’t say it is, but might be a postprocessor issue. I was using a postprocessor from this link: http://www.shapeoko.com/forum/viewtopic.php?t=2379, just set the correct units, I used mm.
Unfortunately my Vectric trial ended, so I cannot use it anymore.

So here is a quick update…I took a video which I will try to post and the software is showing that the spindle is cutting to the proper depth on the second pass (6.35mm) but the actual machine is not cutting at that depth. It does not drop down lower at all for the second pass. I ran the code in the GRBL Panel software with the same result. I am a newbie at that and this is very confusing. I am sure it is a simple fix in the end though. I will try that post processor and see if it works better.

I was able to determine at least part of the problem. The Z axis was bottoming out. The test cut that we initially made was not a through cut, so it did not appear to be set wrong. I adjusted the spindle and reran the cut and now it is cutting too deep. At least there was some kind of progress though. =) Thank you everyone for the input!

I was able to figured out what the problem was. The Gshield that we got came with one jumper for setting the microsteps. This jumper was on the Z axis. I started reading about microstepping and determined that the Z axis was set to 2x microstepping while the X and Y axis were set to 8x micro stepping. I removed the jumper and everything seems to work perfectly.