Upon opening a second connection inside of a transaction (a point at which I would expect a promotion) I recieve the above mentioned error.
The issue turned out to be that my app was 32 bit and the Oracle MTS Recovery Service was running from my 64 bit oracle home. I uninstalled just the recovery service from that 64 bit setup, and reran the 32 bit setup to install the 32 bit recovery service under an existing 32 bit oracle home.
I believe the new managed provider has more options (search for "32" in the link below) but the app currently uses the unmanaged provider. http://docs.oracle.com/cd/E16655_01/win.121/e18595/install.htm