Did some research and testing, the reason the rotating box is greyed is due the fact there are quantities in stock. So the fix, incase anyone else stumbles accross this problem is:
Procedure to change a non-rotating item to rotating:
1) Open the Inventory application
2) Query for the item.
3) From the Inventory tab "Select Action/Inventory Adjustments/Physical Count.
4) Adjust the balance to 0
5) Go to the 'Select Action' Menu.
6) Select 'Reconcile Balances' and the 'OK' button.This will guarantee that the item has a balance of 0 in this particular storeroom.Follow these steps for all storerooms.
7) Now go to the Item Master application and the rotating button is no longer read only and can be checked. Check the box as needed.
Now go to the Asset application, if the Rotating Item field is read only go to the select action and select change item number. Once that box is on screen enter the rotating item number as needed, the asset is now rotating.
