Thank you so much, although I thought static props could be animated, because reasons.
I'll keep that in mind.
Case closed.

Bones are highlited and the other bones (top_gear bot_gear) do not exist.
http://i.imgur.com/336m9Mz.png The bone is linked and there is a weight of 1, there is no collapse bone in the QC, and in the start of the SMD there is a skeleton http://i.imgur.com/9aU2ghN.png

I'm trying to make a simple prop for a level and I end up having the same issue which traces back to an obvious setback, there aren't any bones.

Here is the bone structure
http://i.imgur.com/IdjMo4O.png
Here is the compiled model (with bones axes, note static_prop at (0,0,0) )
http://i.imgur.com/BVMtu5u.png
And here is proof of a skeleton and parents?
http://i.imgur.com/NiLudYK.png

The model I want to compile has 3 bones, 2 that rotate, in the model there is only 1 as a base and 2 that branch off as seen in the first photo, exept in the compiled version there is only one bone, the bone that branches off to the 2 other bones.

For information sake the version I used for blender and blender source tools are:
Blender version 2.74
Blender source tools version 2.6.2

This may or may not be due to having an outdated version