|I have solved the problem!!|
I did not change anything on the 64 bit server. It has the wow64 program files folder and I have found that wow64 is installed and enabled by default on 64 bit server.
So in my solution in visual studio this is what I did:
Highlight the install package and right click and select properties. Go to configuration manager and go to active solution platform, do add new and type in x86.
Then go to the solution project (at top of explorers window), right click and select properties. Under platform at the top right AND under platform target on that screen select x86. Build the solution.
Go back to install package and right click and select properties. Go to configuration manager and make sure it says x86 under active solution platform and then build the install package.
Then install the package on the 64 bit machine and viola, it works. In visual studio the help says: if you set the target to x86 then when it runs on a 64 bit machine it will use the wow64 libraries (which are 32 bit) to resolve whatever. To see this put your cursor on the platform target in visual studio project properties and press F1.