Valve (blame them not me T_T) pushed out a second update which eluded to "Fixed a frequent server crash related to packfiles". I guess that was the problem because our server is playable again (oddly the TF2 news only mentions one update today but I know there was two). I'm guessing Fish never got the first buggy update today so it never needed the second fix. Usually you can't connect a client/server that has different versions so I thought it was something I could fix as Fish worked.
Whatever the nightmare is over at least until Valve updates again T_T.