music app was messing it up.
I have a co-worker that has the 920 as well so we were comparing settings (all were the same) and he made the comment that he does no have Nokia music app to maybe uninstall that. Maybe it was doing something in the background to silence Xbox music.
I uninstalled it and bam, xbox music streaming and cloud worked.
No idea WHY it was doing that but for future reference if this happens to you, check your Nokia music app.