Error importing Contacts with Opportunities (Duplicate value found)

I am trying to do a lookup using a custom unique Contact id, and update the contact, if it exists and add a opportunity to that Contact record. I'm using the NPSP Data importer. I've read through the documentation but I must be missing something.

Importing: Add New and update existing records

I’ve tried 2 things; Match by: Choosing my custom unique ID

I’ve tried Choosing my Unique ID under the Contact1 Imported lookup field.

I've tried doing both at the same time.

The import is trying to add a new Contact record instead of using the unique ID to lookup the contact. It gives me a duplicate value error because it is trying to add a record that already exists. If I do a straight add new contact record, and remove my unique ID, everything maps fine. I have my custom mapping field in my spreadsheet. I created the field on the NPSP Import object and used the naming system that is in the manual for creating custom fields. The field maps fine to a new record if I add a Unique ID that doesn’t exist. It will create the Contact and put the new Unique ID in the contact record. I just can’t get it to lookup the custom Contact id and match by that field. I know I missing something here.  Also, something that I notice is that on the 2nd step where I click, Begin Data Import Process, on the right there are configuration options for matching. I don’t see my custom id there and it isn’t available. If I edit the Configuration Options, it only lets me chose from the standard matchings. Any insight anyone?