Hi @rezenders,
I haven’t used SITL much, and haven’t used mavros at all, so I’ve asked the software team to take a look at this in case they know what’s likely going on 
It would likely be useful if you can specify the ArduSub version you’re simulating, and how you’re running your code.
and rally points are part of missions, so it seems odd to me that they’re apparently being used, especially if you’re trying to manually control the simulated vehicle.
Separately, does it work if you wait for a while? If so you might be facing something similar to this.