It turns out after hours of searching and trial and error that this task is relatively simple.

In your controller you simply do this:

$session = Mage::getSingleton('core/session');
$session->addError($this->__('My error Message'));

in your template file you then call the message like this:

<?php echo $this->getMessagesBlock()->getGroupedHtml(); ?>
I recommend creating some helper methods you can call in your controller:
    private function add_error($error)
    {
        $session = Mage::getSingleton('core/session');
        $session->addError($this->__($error));
    }

    private function clear_errors()
    {
        $session = Mage::getSingleton('core/session');
        $session->getMessages(true);
    }

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