When I make the .kix a .txt it opens the file as if I were going to edit it...

In other words... it seems the .bat file login script is trying to execute the script file directly rather than kix32.exe

If I do:
call %0%\..\kix32.exe %0%\..\testkix.txt
or
start %0%\..\kix32.exe %0%\..\testkix.txt
I get the same results