I am trying to set the outbound caller ID on extensions but they are not showing when calls are made.

When I look in the FreePBX call logs it shows:
Channel Source CLID
SIP/809-00... 809 "enteredname" <809>

It is not sending the number that was entered. In the outbound callerid I have "name" <phonenumber>

Please help, this is driving me crazy.

I once had same situation where I needed to forward the incoming call to some other number and send the original caller's number instead of the number that originated the call from office. I solved this issue by setting caller id before using dial application in the asterisk dial plan like this.

exten => _12345,1,Set(CALLERID(num)=CALLERID(dnid))
exten => _12345,n,Dial(Zap/g1/${EXTEN})

You can do some adjustments as per your need to utilize this.

OK, I have found the problem. My VoIP provider had assured me that it had to be a problem on my end. That they allowed any CID to be populated. Well come to find out someone had put a wrong setting in their system and they were overriding my CID. So after 3 reinstalls and rebuilding and countless hours reading and at least 3 hours on the phone with my provider's tech support department it turned out to be a problem on their end. They hit a button and all is well.