Thank you so much! I now have solved the API rewrites , after your suggestion I realized I was making it over complicated. Now I have a complete install of ZoneMinder running with all features and functions working under a Hiawatha server. Here is the URLToolkit that will allow the ZoneMinder API to work:
UrlToolkit {
ToolkitID = api_rule
Match ^/zm/api Rewrite /zm/api/app/webroot/index.php$1
}