I'll try to express it better - but I'm beginning to think its a procedural not a set-based problem.

Take a row from #Table1

Match the first row (Minimum Date) in #Table2 on the text field call this Match1.

Take the next row from #table1

Match the first row in #Table2 on text field where (minimum date that comes after Match1) - call this Match2 on text field

Take Nth row from #Table1

Match on text field where date = minimum date that comes after matchN

All #Table1 rows should have a match.

So the rule is when a #Table2 entry has now been matched THE MATCHED ROW AND ALL PRECEEDING ROWS on #Table2 should be excluded from future matches.