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Until Apple approves the patch Omni has done, I was able to find a workaround. It seems the problem stemmed from that I had been on the nearby screen before updating to 3.1 & thus it starts there (3GS BTW).

WARNING: If you don't have the Desktop OmniFocus & sync to MobileMe or other WebDAV, this will delete all your data on the phone & potentially not be restorable.

I completely uninstalled OmniFocus on my phone (real easy now with iTunes 9). I then re-installed it, copied my sync config from my desktop OmniFocus & it began pulling down the DB.

Hopefully this can help some people, though please heed the warning as it is a wrecking ball approach.