dx tool failed: Could not create the Java virtual machine - adobe air 26

When I try to publish an ADK using the ADT command with air 26 I get this error:

dx tool failed: Could not create the Java virtual machine

Some users had the same issue publishing in animate here: Re: dx tool failed: Could not create the Java virtual machine

Re: dx tool failed: Could not create the Java virtual machine

However the suggested solution of using an old version of java didn't work for me. I tried installing jre8u74. Got the same error. The odd thing is I can publish using animate using air 26 with no error. However, when using the command line to publish android I get this error. This doesn't make sense. Has anyone encountered this with air 26 or has something become corrupt in my installs?

Thanks!