That was it!
The designer had installed the tap ports using advanced method. Basically, he was aligned to the branch and since the header was sloped the tap/olet ended up slightly out of alignment with the header.
I reinserted using standard tap method and aligned to the branch. This kept the tap and olet inline with the surface of the pipe. This made the branch slightly out of alignment but a slight rotation of the adjacent elbow got me a valid connection.
Lesson learned, Isogen is not forgiving with tap ports....
You can see the slight gap between the olet (yellow) and the header here, this was causing isogen to fail:
And after the fix the olet is aligned with the header and tap port:
And misaligned with the pipe on the outlet of the weldolet instead:
