Well thank me laterI got it working fellas. It was there in front of our faces with the exception of doing a chown and chmod.
Someone else please confirm I will post steps.
1) disconnect airport disk and plug into computer as a USB drive directly.
2) Set up time machine to use this volume.
3) In terminal cd to volume "cd /Volume/HDD"
4) In terminal "touch .com.apple.timemachine.supported" this will create an invisible file.
5) In terminal "sudo chown root:admin .com.apple.timemachine.supported"
6) In terminal "sudo chmod 1775 .com.apple.timemachine.supported"
7) In terminal "ls -l -a" the .com.apple.timemachine.supported file should be -rwxrwxr-t
8) eject disk, unplug from mac, plug into Airport.
9) mount at mac using connect to server in finder (command k) and afp://airportname.local./HDname
10) see if time machine now sees the drive and tries to use it.
I'm looking for more feedback on this system with computers you put to sleep often (like notebooks). I'll try it tomorrow after I get everything set up, but I'd love it if more people want to post. Do you have to reconnect manually after sleep? Or does TM continue to recognize it regardless? What about restarts?