Hi Brandon,
I got a chance to look at this and I believe your second guess is correct. It appears that the administrators of your account have a domain policy that prohibits 3rd party application access. I am going to look a little more into it to see how we can provide a better error message. Unfortunately there isn’t anything we can do about this on our end. It would require administrative action for that google apps domain account.
Can you contact your admins about it?