Hi Brittany,
I did solve my problem, but I also decided that Shopify wasn't the right match for my type of biz. I love MYOB, but Shopify just isn't advanced enough for what we do.
The problem with Fedex was actually with their online display of the various rates from our account. When I actually went to ship a package, the amount was correct that they charged me. So Shopify was pulling the correct rates.
Shopify doesn't support any dimensions being passed to Fedex, so obviously it can't pull live rates for our oversize packages. I get very tired of customer service reps telling me I should just do the calculation and enter the dim. weight for actual weight, since that work around doesn't give the correct rates for every location or carrier.
We use ShipStation, for shipping, which does store the item's actual weight and dimensions, which are passed in the API to fedex or UPS for the correct rate.
It's been very hard to find any shopping cart or online store software that maintains the size of each item and does live shipping calculations.
I can't say what your problem might be. Does shopify have your correct account number, so it's pulling your actual rates and not some 'over the counter' rates, which are much higher. You can test it out and see what XML the shipper is sending back.
good luck. stephen