OK!! I fixed the latency. Here is what I did and no I have no idea how I got there!
I looked in the task manager and the computer was not running ASIO and that is why the ASIO button was not working.
opened sonar X2
went to preferences and deselected all the maudio i/o's.
selected mobo on board sound and ASIO engine started.
opened ASIO from task bar
selected all maudio i/o's in ASIO panel
deselected mobo on board sound in ASIO panel
closed ASIO panel
went back to preferences
deselected mobo on board sound in preferences
selected all maudio i/o's in preferences
applied settings.
IT WORKED!
Now I am back to the same issue that I had when I upgraded to X1. I get drop outs now and then and CPU spikes. At least I fixed my latency issue.