Both processors have to match EXACTLY, including the stepping code.

They do,

They came from another dell server together.

Which Dell server? Both from the SAME server? What is the model of the processor?

Assuming they match and are supported in this server, you might try clearing the NVRAM using the jumpers on the motherboard.

Intel(R) Xeon(R) CPU           E5607  @ 2.27GHz

Yes they were paired together.

Tried clearing the nvram. Still same error , also only 32 out fo the 64 gb showing.. though thats probably due to the second processor not showing.

According to Bios release notes, the Bios needs to be at least 1.3.8 to support the E5600 series processors.

http://downloads.dell.com/FOLDER00114905M/1/PET410-010900cBIOS.txt

"System:         Dell PowerEdge T410
Version:        1.3.8
Release Date:   02/26/2010
 
This release supports the following features since version 1.2.4:
 
1. Added support for Intel 5500 chipset.
2. Added support for Intel Xeon Processor 5600 Series (support only for Intel 5500 chipset and later)
3. Added support for LV DIMMs.
4. Added support for Intel Turbo Boost Power Optimization."

If your Bios is not at this level, put the old processor back in and update the Bios.