Thanks for your timely response! I shot a reply on stack overflow, but thought I would post it here as well (not sure which you will see first).
I tried what you are suggesting and both the web.config and web.dev.config files were deployed, however, the transformations were not done so both config files were sitting separately on the server. I tried a standard publish through visual studio and the transforms still work as expected. Only when I use the redgate deployment manager am I running into the transformation issue. Any other suggestions?