Generally, most people, I guess, go from 5.3 ML4 Directly to TL 7. So they may never run into this issue.
For the rest of us, here is the resolution of my problem in going from ML6 to TL7.
Apparently with the change from ML to TL IBM added a "BuildDate Verification" routine into instfix/installp. this "buildate" is strictly followed without anyway to disable it.
See the PDF I attached to my most recent post.
Starting with TL7 ibm introduced build date stamping on the filesets.
TL7 SP8 (5300-07-08-0845) --> the 0845 is the build date of 08th Month and 45th Week of the year...
TL8 SP2 (5300-08-02-0830) the 0830 is the build date of 08th month and 30th week. The update will Fail.
So to make sure the installs succeed, for me, I had to copy over the SP10 files with the TL7 file, and then install. then the update succeeded.
So pay attention to the four numbers of the TL's. Thanks to all those who Replied.