how do you stop and deallocate a windows azure virtual machine
Found it. So even though the machine is 'stopped' (which means it isn't running) the shutdown button in the management portal is still enabled. Clicking 'Shutdown' moves the virtual machine into a 'stopped(deallocated)' status.
So powering down from inside the virtual machine operating system isn't the same thing as an azure 'shutdown'.
In the new portal, select the "stop" button to get to the deallocated state.