That is indeed how I have it wired during sketch upload and when I tried to use the esptool. I did try powering it just from the FTDI once when I was running out of things to try.
Regarding running the software, I remove the GP0 to ground connection. Just for the heck of it I also tried removing everything but vcc/gnd and no cigar.
The error I am getting in my first post with the python tool and the lack of various serial console messages leads me to thinking it's a bigger problem. (Hopefully not though!)
Thanks,