USE test
DBCC SHRINKFILE(2,20)
Since we already know that the fileid is 2, go ahead and try this.
Hooray!! That worked!
Did some additional testing there must be something weird going on with the file name because using the file id instead of logical name for DBCC SHRINKFILE(2, TRUNCATEONLY) works also.
Still a weird issue but thanks everyone for there help on this!