DSM leaving gaps between LIDAR and polygon used for water surface.....

cnetto

Hello Global Mapper Community!
I am trying to create a DSM with a hydro-flattened feature.

My workflow...
I created a polygon of my lidar data ("lidar coverage polygon") and a polygon with an elevation of 2 ft ("water polygon"). I than clipped the lidar coverage polygon from the water polygon to get the shoreline. I then created a DSM using the lidar data and the water polygon. 
When the DSM is created, it has a gap between the shoreline (see images). I have also tried expanding the water polygon so that is overlaps into the shoreline, but I get the same results. I also tried increasing the grid size in the DSM and increasing the soft edge. Nothing seems to affect this gap. I also included an image of the parameters used. 
Any help would greatly be appreciated.