Fixed it, though I'm not sure what is going on... let me explain.

If you look at my prboom.cfg file you will see this line for my pWAD file.

wadfile_1 "SIGIL.wad"

Now inside of PrBOOM it show the wad file as SIGIL.WAD"

I used my controller and was able to delete the quote symbol off the end and now it works like it was supposed to. The odd thing though is that my prboom.cfg file looks exactly as it did before.

What's that all about?

And oddly enough I am attempting to duplicate all of these steps on my Pi3 setup and I am back to where I began. Except now the WAD Header error has a lot more garbage at the end than ever before.

EDIT: This only reflects the Run Command method.

Thanks @dudleydes
I updated my original post to say "PWAD" instead of "IWAD" so I didn't look like an idiot haha

I think the wiki page is out dated because it refers to /opt/retropie/configs/doom/ when mine actually has /opt/retropie/configs/ports/doom/ instead. Maybe someone should update that :-)

Here's what I did (hopefully no typos):

mkdir ~/RetroPie/roms/ports/doom/class_ep
unzip class_ep.zip -d ~/RetroPie/roms/ports/doom/class_ep
ln -s ~/RetroPie/roms/ports/doom/prboom.wad ~/RetroPie/roms/ports/doom/class_ep/prboom.wad
ln -s ~/RetroPie/roms/ports/doom/doom.wad ~/RetroPie/roms/ports/doom/class_ep/doom.wad
cp ~/RetroPie/roms/ports/doom/prboom.cfg ~/RetroPie/roms/ports/doom/class_ep/
nano ~/RetroPie/roms/ports/doom/class_ep/prboom.cfg

# Files wadfile_1 "Class_Ep.wad"

nano ~/RetroPie/roms/ports/The\ Classic\ Episode.sh

#!/bin/bash /opt/retropie/supplementary/runcommand/runcommand.sh 0 "/opt/retropie/emulators/retroarch/bin/retroarch -L /opt/retropie/libretrocores/lr-prboom/prboom_libretro.so --config /opt/retropie/configs/ports/doom/retroarch.cfg /home/pi/RetroPie/roms/ports/doom/class_ep/doom.wad" "lr-prboom"

chmod +x ~/RetroPie/roms/ports/The\ Classic\ Episode.sh

Then I restarted EmulationStation
Ports -> The Classic Episode -> New Game -> The Shores of Hell