Yes, I was able to solve the issue.
I wrote a Letter of Instruction is to correct a IRC 404(a)(7) excess annual contribution.
When withdrawing the excess contribution, any Gain between when the contribution was made and when you withdraw the excess will be taxable.
See calculations on IRS Form 590A, Worksheet 1-3, pg 30.
Once this was completed with the 401K administrator, I filed an amended tax return.
Hope this helps!!!
