Tried all those suggestions, but none of them worked. The good news is I was able to fix it. And will post that here just in case anyone else runs into an issue like this.
I thought that it was odd that I was unable to exit (on this emulator only) Turns out it wasn't the emulator as I was using that emulator for the 32X and Sega CD as well. What I did was used my FTP client to download the 32X "retroarch.cfg". I then modified the cfg file so that it would point to the megadrive section of attract mode.
# Settings made here will only override settings in the global retroarch.cfg if placed above the #include line
input_remapping_directory = "/opt/retropie/configs/megadrive/"
#include "/opt/retropie/configs/all/retroarch.cfg"
I then deleted the weirdly configured and messed up auto cfg file that picodrive was forcing everytime I launched a game for the Mega Drive. I then uploaded the newly modified 32X retroarch.cfg file into the megadrive folder.
Now everything works as normal again. Thanks for your assistance though.