First off, thanks to everyone for all of the replies. It is great that to have this many people helping out. Now, I just hope it doesn't turn out to be something stupid.
I took a few pictures that (not the best, sorry). One shows the derailluer in the middle chain ring position and another shows it in the small chain ring.
The derailluer doesn't look like it slipped (the middle and big rings shift fine) and in any case it doesn't look like that would cause it to hit the frame.
Anyway, please keeping the ideas coming. It is probably something simple but I can't figure it out.
Thanks