I have solved my own problem. Here is what I did.
I noticed that compared to other clients i have installed this for. I was missing a table, kfm_plugin_extensions.
I was able to export this table from another CMS database and import it into this database.
Now when I went to add an image it came up with "please wait loading" and the "Kae's file manager" header.
I remembered from a previous support assist that this error was due to a script issue in the kfm/index.php page.
I used this fix and changed the script in the index page and it now works!
I just thought I would share my experience with others!