Run "mem /c /p"

That will show you a list of every TSR that is loaded, it will tell you where all that memory is going

The problem here is that I have enough mem free, stuff just dont want to work.

Well not really, you've only got 473KB free conventional memory, which isn't much at all! Conventional memory is different to your total memory.
Most software from the 90's onwards will demand at least 570KB free conventional memory at a minimum, sometimes more, unless they run in protected mode.

You need to go through your AUTOEXEC.BAT and CONFIG.SYS, and remove anything unneccessary.

Sounds like you don't have an expanded memory manager since you've got no upper memory, if you load EMM386 you can load your device drivers and TSR's high to free up a fair amount of conventional memory.

Have you run memmaker? Works pretty well in my experience.

I uploaded my autoexec and config files (in txt format) as well as 2 pictures of running mem /c /p taken with my tablet in a zip file.

http://dl.dropbox.com/u/28835334/486mem.zip

do you really need those IOMEGA and PWRSCSI drivers loaded? that's were your conventional ram is consumed

memmaker is definitely worth a go.

If you don't want to do that then my suggestions are:
edit your CONFIG.SYS
After DEVICE=c:\dos\himem.sys add this line:
DEVICEHIGH=C:\dos\emm386.exe noems

Change the DOS=HIGH line to read:
DOS=HIGH,UMB

You could also edit AUTOEXEC.BAT and place the two letters LH at the start of C:\PWRSCSI!\CORELCDX.COM line.

That should load a few drivers high and free up a bit of conventional memory. However you appear to have two different SCSI drivers - Iomega and Future Domain. Are you using both of them? As you can see from your mem /c /p screenshot these drivers are taking up heaps of space. You probably won't load both of them into upper memory, there's just not enough space.
You also don't seem to have a DOS mouse driver? And no MSCDEX.EXE or alternative for DOS CDROM support.

I have CuteMouse that I load as needed. I need Iomega for my 100mb parallel zip drive, and Powerscsi is for my CD drive and SCSI card that was added years ago. I will try the other changes to autoexec and config files when I get back in my room later on and post if makes any changes.

I cannot use noems line or it locks up with garbled text. Other stuff isn't helping either.

memmaker did the trick. I also removed the iomega stuff so if anyone knows a way to use my zip drive that uses less memory let me know.

So what does MEM /C /P say now?

I was going to suggest that the crash on boot was because your SCSI controllers have an option ROM taking up memory address space that EMM386 may be trying to allocate as upper memory. I'd be interested to see your AUTOEXEC.BAT and CONFIG.SYS now.

MEMMAKER usually does a pretty good job but there are extra tweaks you can do too. Try reading this thread Dos 6 conventional memory tricks

As for your Iomega drivers - I would try and see if there is a newer driver available that takes up less memory space. Then if you check the size of the installed drivers using MEM /C /P you can try only loading certain drivers high (using LH in AUTOEXEC.BAT or DEVICEHIGH= in CONFIG.SYS will load a driver into upper memory - to load into conventional memory remove the LH or simply use DEVICE= in their respective files). By rearranging the drivers this way you can sometimes optimise them to get the maximum amount of conventional memory.

Alternatively you can always setup a boot menu in your CONFIG.SYS to specify a normal configuration without the Iomega drivers, and one that loads then. When you actually want to use the ZIP drive, just reboot and select the configuration that loads the drivers. See here for info http://dos.rsvs.net/DOSPAGE/CONFMENU.HTM

does lastdrive need to be Z:

Adjust your sig and stuff, there won't be any additional warning.