Thanks everyone for all your advice. I am going to to try a different seat and a different set of pegs.
I also have another idea too if the new seat doesnt work. It seems to me that the seat bumper kit is made out of a very hard rubber material. Because of the hardness of the bumpers, they dont insulate the seat at all from the vibration off the fender. I think that I can probably rig up something to fit between the bumper and the seat to dampen this some. Maybe I can glue some soft rubber or something to the spots under the seat that make contact with the bumpers. I will have to look around my shop for materials that might work. It will be tricky because I dont want the seat to be elevated up too much.
One positive out of all of this is that we (my wife and I) are having a great time razzing each about the seat. I tell her that she should like all the vibration, and she tells me that she is not that kinda girl. It might be worth keeping the seat the way it is a few more weeks so that we can continue the debate.
Anyways thanks again guys!