The issue I ran into is that I followed the kit instructions too closely. Here is the exceprt regarding topping off and taking the hydro reading:
"Once the wort has cooled to 80F, pour the mixture into the sanitized primary fermenter and add cool water to make 5 1/4 gallons. Check the specific gravity of the wort using a hydrometer."
A beginner like me is going to do exactly what we are told. The issue is that the instructions do not say to thoroughly mix the wort and top-off water via aggitation or some other means. It just says top off and take a reading.
Since I aggitated when I added the yeast, that is when I took my second reading and I hit the gravity on the nose.