I have gone to the inn and let every player character in my party be dismissed to make sure i had room for him but when I go talk to him the dialogue says my party is too full. I was not able to dismiss the 3 current npc's in my party however. is there a way to do that?
Thanks!

Have you tried talking to them via the 'Talk' command in the radial menu? There is usually an option to dismiss the NPC in the ensuing conversation options.

Thanks! It actualy dawned on me whiile driving to work! That was it!