Just wanted to update this, it took a month but since I decided to completely remove canonical tags and try and handle duplicate content with url rewrites and 301 redirects and I now have 114 out of 149 indexed from my sitemap which is much better. it ended up to dropping to 5 out of 149 at one point.
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RE: Sitemap indexed pages dropping
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RE: Database driven content producing false duplicate content errors
You have a few options you could do. One thing I would look into is maybe doing some url rewriting to change
contactus.aspx?propid=200
to
contactus/propid/200
look at http://msdn.microsoft.com/en-us/library/ms972974.aspx on how to do that for IIS.
A better option I think if you need to keep the parameters the way they are is to use the rel canocial tag look at moz article
http://moz.com/blog/rel-confused-answers-to-your-rel-canonical-questions
but basicly you would need to add something like this to your contact.aspx page(replace example.com with your website url)
This suggest to the website crawler, like google or moz crawler, that those pages should be assoicated with the contact.aspx page.