In case anyone else has this issue here is what I did to solve the problem.
I thought that I didn't need the DisabledImageUrl but it turns out that I do after all. The problem was arising when the following style was applied to the disabled button.
For some reason in IE 8 the edges of the disabled image are not displayed correctly when this style is applied. To override this style place the following in the page with the control in question.
This eliminates the opacity that is being applied to the image and the display issues. This of course will make the image look exactly the same disabled as it is enabled. This is not good so take the original image and alter with an image editor to get the desired transparency. Add that image to your project and then specify the url for the newly added image in the DisabledImageUrl.
This fixed my display issues. Hope this was helpful to someone else out there in the same boat.