Ryan
The second method should work. On the dynamic label, did you have this property set:
If so, you may need to sanitize the html source using the Sanitize Java action from Community Commons. Also, if its a full HTML document (i.e. starts with an <html> tag), you may need to remove the html tag to get it working.
Hope that helps,
Mike
Aren’t you able to parse the HTML into a different Mendix objects and create a PDF based on PDF template?