I finally figured it out. It was easy once you know.
I was creating a default object in the model instead of a default value for the dbms. Once I figured out how to delete the default object in the model it stopped showing up in the list to choose from. I was able to create the default value for the dbms as you described and assign it to the column. It is working fine now. I was able to add newsequentialid() and getutcdate() to the default value list.
Thanks for your help.