Thanks for the suggestions however I ended up figuring it out. Turns out the Microsoft Dynamics Integration - Integrated Company role in the GP Web Service was missing the Query Shipping Methods and Query Payment Terms operations. This was causing an access denied exception when the Connector service tried to connect to the web service. I figured it out by turning verbose logging on of the Connector service and getting more details about the error I was seeing in the normal (in application) log.
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