I played with it a little more last night. I was able to use the thunderbolt cable that Apple sells separately to use my Thunderbolt display as a second display for the iMac. To clarify the cable coming out of the Thunderbolt Display was not connected to anything and the accessory cable was plugged into the Thunderbolt Display and the iMac and it was being used by the iMac as a second display.
Still no luck trying to get my iMac to work as a second display running off my MBP.