OK. Here is the log with wifi and mobile data turned off. Note that the phones are paired and I can share files via bluetooth with ES File Explorer.
Out - 2014-02-10 14:17:42.749 - Error sending: Can't connect to the Internet
Out - 2014-02-10 14:17:42.696 - Retrying (4/5)...
Out - 2014-02-10 14:17:32.650 - Retrying (3/5)...
Out - 2014-02-10 14:17:22.595 - Retrying (2/5)...
Out - 2014-02-10 14:17:12.547 - Retrying (1/5)...
Out - 2014-02-10 14:17:02.535 - Couldn't send through Bluetooth: read failed, socket might closed or timeout, read ret: -1
Out - 2014-02-10 14:17:02.434 - Couldn't send through Wifi: Skipping wifi because of setting
Out - 2014-02-10 14:17:02.414 - Sending: Text: "State=:=Office" to HTC...
Out - 2014-02-10 14:14:29.905 - Error sending: Can't connect to the Internet
Out - 2014-02-10 14:14:29.860 - Retrying (4/5)...
Out - 2014-02-10 14:14:19.818 - Retrying (3/5)...
Out - 2014-02-10 14:14:09.782 - Retrying (2/5)...
Out - 2014-02-10 14:13:59.734 - Retrying (1/5)...
Out - 2014-02-10 14:13:49.701 - Couldn't send through Bluetooth: read failed, socket might closed or timeout, read ret: -1
Out - 2014-02-10 14:13:48.445 - Couldn't send through Wifi: Skipping wifi because of setting
Out - 2014-02-10 14:13:48.407 - Sending: Text: "Test Message Via Bluetooth" to Hitachi S4...