Okay I found the formula that works:

"=OR(ISBLANK(D4),AND(NOT(ISBLANK($C4)),NOT(ISBLANK(D$3))))"

now I just need a line of code that produces an error/message box notifying the user why a cell has been circled.

e.g. If CircleInvalid=True
MsgBox "Cell circled because..."

Any ideas?