After alot of googling and some trial and error I figured out the problem.
BTC-E provide you an unpadded key basically. Some apps will deal with this others won't.
In my gauth app I had to pad out the key to make it dividable by 8. This was done in my case by adding one extra "=" to the end of the key they provided. Thats the accepted padding for BASE32. You can add any amount of extra "=" to make the total key length dividable by 8.
So there you are, hope this helps someone out! If it did and you are in a generous mood please consider a small donation for my efforts!
1EQMmUirpFwvQdooD7qR6u9sxRhSgR6cVk