UPDATE:
well its been a while. After a couple hours of staring at the computer screen I figured out what was wrong. For reference I will post it here for anyone with a similar problem. I am unsure how long I can keep the screenshots up though...
There was a cobination of problems that caused this but the two biggest were the following:
1. I had hit compress all images (which I later learned was a big no no)
solution: I compressed each image indivually.
2. Due to previous compression I had a corrupt file
solution: I downloaded a fresh copy of the car mod.
now it runs great and I couldn't be happier.
If anyone is having trouble with car mods for vice city, pm me and I can try to help you