I got rid of the DOS style line endings.
Also put the hal file at the ini folder and the layout.ini file there as well.
now linuxcnc crashes and shows this:
Print file information:
RUN_IN_PLACE=no
LINUXCNC_DIR=
LINUXCNC_BIN_DIR=/usr/bin
LINUXCNC_TCL_DIR=/usr/lib/tcltk/linuxcnc
LINUXCNC_SCRIPT_DIR=
LINUXCNC_RTLIB_DIR=/usr/realtime-2.6.32-122-rtai/modules/linuxcnc
LINUXCNC_CONFIG_DIR=
LINUXCNC_LANG_DIR=/usr/share/linuxcnc/tcl/msgs
INIVAR=inivar
HALCMD=halcmd
LINUXCNC_EMCSH=/usr/bin/wish8.5
LINUXCNC - 2.5.3
Machine configuration directory is '/home/probotix/emc2/configs/Comet'
Machine configuration file is 'Comet.ini'
INIFILE=/home/probotix/emc2/configs/Comet/Comet.ini
PARAMETER_FILE=emc.var
TASK=milltask
HALUI=halui
DISPLAY=axis
Starting LinuxCNC...
Starting LinuxCNC server program: linuxcncsvr
Loading Real Time OS, RTAPI, and HAL_LIB modules
Starting LinuxCNC IO program: io
Starting HAL User Interface program: halui
Shutting down and cleaning up LinuxCNC...
Killing task linuxcncsvr, PID=2271
Removing HAL_LIB, RTAPI, and Real Time OS modules
Removing NML shared memory segments
Cleanup done
Debug file information:
Can not find -sec MOT -var MOT -num 1
Can not find -sec IO -var IO -num 1
Can not find -sec LINUXCNC -var NML_FILE -num 1
Can not find -sec EMC -var NML_FILE -num 1
Unrecognized line skipped: POC FMS LEN DIAM COMMENT
xhc-hb04.hal:23: Pin 'axis.3.jog-enable' does not exist
2271
PID TTY STAT TIME COMMAND
Stopping realtime threads
Unloading hal components
Kernel message information:
[ 423.960726] I-pipe: Domain RTAI registered.
[ 423.960743] RTAI[hal]:

.8.1> mounted over IPIPE-NOTHREADS 2.6-03.
[ 423.960750] RTAI[hal]: compiled with gcc version 4.4.3 (Ubuntu 4.4.3-4ubuntu5) .
[ 423.960874] RTAI[hal]: mounted (IPIPE-NOTHREADS, IMMEDIATE (INTERNAL IRQs DISPATCHED), ISOL_CPUS_MASK: 0).
[ 423.960881] PIPELINE layers:
[ 423.960888] fa970e20 9ac15d93 RTAI 200
[ 423.960894] c085cb20 0 Linux 100
[ 424.006042] RTAI[malloc]: global heap size = 2097152 bytes, <BSD>.
[ 424.006756] RTAI[sched]: IMMEDIATE, MP, USER/KERNEL SPACE: <with RTAI OWN KTASKs>, kstacks pool size = 524288 bytes.
[ 424.006771] RTAI[sched]: hard timer type/freq = APIC/12468630(Hz); default timing: periodic; linear timed lists.
[ 424.006781] RTAI[sched]: Linux timer freq = 250 (Hz), TimeBase freq = 1795472000 hz.
[ 424.006789] RTAI[sched]: timer setup = 999 ns, resched latency = 2944 ns.
[ 424.006923] RTAI[usi]: enabled.
[ 424.075597] RTAI[math]: loaded.
[ 424.198849] config string '0x378'
[ 427.290809] RTAI[math]: unloaded.
[ 427.325905] SCHED releases registered named ALIEN RTGLBH
[ 427.389453] RTAI[malloc]: unloaded.
[ 427.488026] RTAI[sched]: unloaded (forced hard/soft/hard transitions: traps 0, syscalls 0).
[ 427.492533] I-pipe: Domain RTAI unregistered.
[ 427.492670] RTAI[hal]: unmounted.