What exactly do you mean by:
So maybe just create a hdfs user and give it a password and logon in Ambari with that user.
Create a hdfs user where? In Ambari or at the OS level? I already have an OS level user that I have added to Amabari and it spits out the same erorr:
500 User: root is not allowed to impersonate lrichards
What is trying to run as root?