Sounds like switch problems to me, check switch adjustment under the apron were the second ball is stored before being ejected in to shooter lane.
I think all eject holes on the playfield are cleared when a game is first turned on, check switch adjustment.

Thanks, Ill take another look at the switches for both but I'm not sure that's the answer for eject hole. You are right it does cycle through and eject all balls on start up but I can drop ball after ball into it before starting a game and they all automatically eject, so I the switch must be reading that the balls there. If I manually light "capture when lit" with the glass off (which is when the ball is suppose to be held in this hole) and then hit the top eject hole, the ball is ejected from the side eject hole just like its suppose to.
I hope that all makes sense. In a nut shell though the side eject is working as it should except for when that first ball goes in before its lit.