In the end it was not the wiring and it was not menu configurations. The software on my Dynon SV-XPNDR-261 was out of date. It was so out of date that it would not receive information from the GTN650. Once the software got updated on the transponder - everything works. I can generate PAPR reports and track using ADSB.
A note on updating the software on the Dynon transponder. If you have Dynon screens, then you can update from that system. Unfortunately, the AFS screens do not allow you to update the software on the transponder. So, either get hooked into a Dynon screen or send it away to Dynon to get the software loaded.
Thanks to Jonathon who helped me troubleshoot on the phone and eliminate issues until I was able to get an avionics shop to find the transponder software issue.