Ok, I had to do a little follow-up and send out a few letters documenting my site’s problems.
Matt Cutt’s explanation of the canonical tag is perfect. Around the 5-minute mark he explains things that effect your site and what to do to
prevent a canonical situation:
1. Normalize URLs
2. Link consistently on the site
3. Implement 301 redirects
4. Set preferred domain
5. Include standardized URLs in sitemap
6. Include canonical attribute
Before my situation I had done 1,2,3 and 5. I have since completed 4 and 6.