Further details as my team have been debugging this for the past 3.5 hours.
This part on our server returns error free:
ChannelService channelService = ChannelServiceFactory.getChannelService();
token = channelService.createChannel(clientId, 1439);
When
we try and use this token it fails and as Ananthakrishnan desribes, our
GWT code is setup to retry by creating a new channel. This killed our quota.
We also
have a java client using this channel and we are able debug. We are
noticing that our parsing logic for the response from
talkgadget.google.com doesn't seem to give us valid results. Something is wrong on that end.