There was an error in the Nexus 5 config that was trying to download a version that doesnt exist. Im very suprised this hasnt been brought to my attention before but I just fixed it.
Delete the _currentrecoveryversionNexus5.ini and configNexus5.exe files from the tools folder. Start the Toolkit and select the Nexus 5 device (03). The Toolkit will download new model files to fix the problem. It is IMPORTANT to delete the _currentrecoveryversionNexus5.ini file to fix this.
Recovery images should download fine now.