The answer? The holes were drilled into a drainage pipe, a toilet was flushed...and tears formed.
Yes, we used a stud finder (I'll spare you all the stud jokes that get told during the use of a stud finder). The pipe is actually pressed against the dry wall. They probably figured it didn't matter because it was a laundry room. Well Mister Builder Man...it does matter when a handful of years later a sweet couple want to make your laundry room into a pantry. IT MATTERS!
So as I type this there are three guys in the one-day-pantry (ok not that dramatic, tomorrow the pantry SHOULD be finished). They are cutting out the dry wall and the pipe. Tomorrow morning we are going to replace the piece of pipe with new pipe and fix the dry wall, and then finish the pantry instillation.
So our first DIY house project isn't exactly going as planned.