Found the issue. My plan on AT&T blocks RTSP. Using a Tmo SIM with VPN plan, opening videos from m.youtube.com works perfectly. After switching to Tmo, I also had to make changes to the APN to wap.voicestream.com. 126.96.36.199 does malform the request, however, and drops some important information. When making the request, the BB drops the request because it cuts the 3gp/ like so:
SETUP rtsp://ourserver:554/playlist/pdddman_0ff89de99d4a8f4b04cb162bcb5740cf_1210362753860.3gtrackID=1 RTSP/1.0
User-Agent: BlackBerry8310/188.8.131.52 Profile/MIDP-2.0 Configuration/CLDC-1.1 VendorID/102
and the request SHOULD read:
Looking into it further and loading up .18 to see if it helps.