Thanks for the reply. You were correct in that the problem was in the atmosphere settings. There seems to be a three way conflict created between the 'sky color map distorsion', 'fog in sky' on the sky tab along with the 'fog' in the fog & haze tab. I don't have it all figured out yet but it seems to be a combination of these three causing the banding. Essentially I turned off all of the atmosphere settings and turned them back on one at a time to figure out what was causing the problem. Thanks for pointing me in the right direction.