Hi MIke,
I've just encountered this same issue when testing LTI with Schoology and the solution is to add Moodle as an LTI tool on the Course Level and not on the Material/Resource Level.
You can follow the steps from the link below:
https://support.schoology.com/hc/en-us/articles/206401048-Course-Materials-External-Tools
Go to the "Setting Up LTI External Tool Providers in Schoology" section.
Hope this helps!