Well - a filler form as I read you can't use the custom task pane in a web browser form.
One thing I am thinking (but can't find out how) is can I have the Project Loaction for the code be placed on the SharePoint site? If so, how do I reference that path in the location section? It's a thought, but I think that is where I am having the problem - even with the form where I removed the code. I could be wrong, but that's the only thing I can think of that would be causing the issue.
Just to give more info on what I am seeing - I tried to open an older version of this form (I save periodically to keep my progress), and I recieved the error as decsribed - "This form cannot be opened because it requires the domain permission level and it currently has restircted permission. To fix this problem, open the form from the location it was published to - gives the path." I click show details and get - "Forms that require the domain permission level contain features that access information on a network, such as data connections, linked images, and code."
But now when I open in design mode and save (don't change anything) it prmpts as a new file. So I saved over the original and closed. I am then able to open the file. I'm not sure if there is a connection,but just providing more info in case it helps identify the issue.