I never figured out a solution to this problem and ended up just using a workaround, but now I can't get around the issue.
I realized the problem is that in the "Post/Page Info Items", "#" is used to escape certain letters, and thus gets converted to "\" in the URL.
I can use anchor links with # in the center column, and they are fine, it's just fact that I am trying to use them within the Post/Page Info Options of ATO. (I turned all plug-ins off btw, so this has got to be Atahualpa.)
Any way to get around this? I am extremely suprised that this was never caught before.
I am using 3.4.5 and WP 2.9.2. My site is http://www.adamcapriola.com
EDIT: I switched my Disqus
plugin back on which alleviates the error to an extent.
You can see in the "Leave a Comment" link it looks like this: "http://www.adamcapriola.com/\dsq-new-post" when it should be "http://www.adamcapriola.com/#dsq-new-post"
Thanks in advance JD/Flynn!