Josh, you don't say which OS you are using. If windows then I've had the same problem - forget the environment variables, simply strip carriage returns out of tnsnames.ora and sqlnet.ora and all will start to work.
I got this fix a little while ago courtisy of someone on another mailing list, so all thanks go to him.
By the way, if you don't have an editor that can save the .ora files without CR's just ftp the files in ascii mode to a Unix box then ftp them back in binary mode...that will do the trick.
Paul