UPDATE!!
I forgot I even posted this, and I cannot believe how long ago it was, but I did end up getting this to work if anyone is interested. It's pretty basic and I attached a screen shot as well displaying the modules I used. It goes like this:
1. Custom API call to search for reserved time (RESVT).
2. Iterate the data array from the previous module.
3. Read or Search for User Name, ID.
4. Custom API call to search for assignments (ASSGN).
5. Iterate the data array from the previous module.
6. Filter for date range. PTO end date later than Task planned start date AND PTO start date earlier than Task planned completion date.
7. Create an Update record, posting a message, and notifying the Project Owner.
8. Lastly, we are using the externalRefID to post a "processed" indicator to make sure we don't keep pulling the same PTO and sending multiple notifications.
Hope this helps guys!