In case anyone else gets this problem
I solved it by using -soundindev 0 and -soundoutdev 1 where device 0 is the OSS full duplex device and device 1 is the oss playbackonly device. pd does not like to open the full duplex device rw so you have to use the other device for output.
no -soundindev and -soundoutdev options are only availible in version .35test4, not in .34. Thank you Miller for .35!
Ben