So I found something interesting somehow the template is showing correctly and I can send a test, I believe because its from the select template section. However When you click on "Save template changes" or "Save and next" it gives the above error, BUT if you click "Confirmation" in the breadcrumbs it allows you to move to the next screen. Does this mean we can send it out and its fine?
So I just want to say I both love and hate our good friend modsec. The email html was hitting a rule on mod-security and making it trip ballz. I have rectified this issue after getting blocked from accessing the server (courtesy of modsec) also how i discovered the problem and we are all good again.