I've tried several different themes. All the themes activate and are visible on the webpage. I have atahualpa intalled and it will activate so I can access the back of the theme to modify and use it but when I try to see it on the webpage I get a error 500 internal server error or a 404 error. I've tried everything from reinstalling the theme to reinstalling wp. Is there a known problem with this theme.

What version of atahualpa and wp?
What is the URL?
Who is your host?
Did you do an automatic or manual install?

All of the newest versions. I just did it two days ago and worked with it a bit this morning. The site is hosted through godaddy. The site is http://porterpropertyrenovations.com
I did a manual install of everything.

Does anyone have any thoughts on this?

do a manual install of version 3.5.3 (from http://wordpress.bytesforall.com/?p=94)
there is an issue with 3.6 and you might be hitting it, so try 3.6

Also, please always name your exact version - if you say 'I am using the latest' - three months from now it won't help someone else looking at the thread.