I finally got it to work! It had nothing to do with the update because I called and they said I showed I was on 3.1 since I got my Escape in March. I happened to ask what the difference between Restore Factory defaults and Master Reset was. He explained that factory defaults didn't clear your data but put it all back to the default as it was installed. The Master reset clears all data. I told him I already did the Master reset and he suggest I try the factory defaults then the master reset because of what I mentioned. I first deleted all BT devices, then factory reset then master reset. Re- paired my phone and bingo.
So if this happens again, try these steps.
So if this happens again, try these steps.