This is my most recent attempt with UDK. Its another proof of concept. Here is also a link to actual animation. Video
The overall process of getting the blendshapes and animation into the engine was rather painful. However in the end I finally figure out the process and the limitations of this this method of rendering.
Problems and Solutions
Exporting Character Meshes
My current setup for animation in Maya is that all animation is done on referenced rigs. The reason for this is to allow my animator to animate on rigs even if they are not fully completed. This also allows me to update the rig without breaking or affecting the animators current animation. However, this setup came with unexpected problems. Since the rigs are referenced in Maya, the referenced rigs all contained an additional prefix. So that MyRig when reference would be named MyRig_MyRig.
Originally I exported the character mesh from the MyRig file. This exported all of the joints and skin clusters. Then I exported the animation from the referenced file. However, the referenced file contain the prefix MyRig making the exported animated joints be named MyRig_joint1 instead of joint1. This created a naming conflict causing my animations not to work. So in order for me to keep my setup of the animator using a reference rig, I reference the rig into an empty scene and exported it to UDK. This appeneded the additional prefix and resolved the problem. Hopefully that makes sense to anyone who is reading this.
In addition to that, my blendshapes weren't exporting correctly. They all were the default unmodified face. The problem was due to my rig having expressions on the blenshapes caused by the blendshape controllers. So when ActorX tries to export and supposedly attempts to dial the blenshape it fails because of the expression connection. This forced me to have another file in which the controllers for the blendshapes were removed allowing the blendshapes to correctly export.