** Resolved **
** RESOLVED **
For anyone interested in the resolution, read below.
I removed AP3 from the WDS and changed the config on AP2 to only do WDS with AP1. With AP3 OFF the network traffic went back to normal. No problems.
I reset AP3 and re-programmed the unit as a Universal Repeater. I attached a new 9dBi antenna and did a site survey from AP3 and picked AP2 as the Root AP to repeat. 55% signal strength as opposed to 22% with factory antenna.
I let the network settle for a while and then captured the 802.11 again. Completely normal traffic on both the ethernet and 802.11
Router hardwired to AP 1
AP 1 WDS --> xx:xx:xx:xx:xx:11
AP 2 WDS --> xx:xx:xx:xx:xx:10
AP 3 set to Universal Repeater
Root AP - xx:xx:xx:xx:xx:11
Hope this helps someone in the future. For what it is worth, the original setup that I did should not have been problematic, but apparently the poor signal strength was the culprit in the abnormal amount of 802.11 traffic.