Trying to understand Original Sin in light of OT From what I understand so far, is that Adam's sin of eating from the tree is past down and everyone born has this sin on their record.

This Sin is only washed away if one is Baptized, so if a child born dies at say 6 months will go to Hell because they have this Sin.

Women suffer labor pains because of this Sin, and men are put in charge over them.  Men will toil on earth because of this Sin until the end of time.

God is also just and this sin has to be paid for. 

The Old Testament makes no reference to this sin, in fact it teaches that you will not bear the burden of anyone else.  How is this fact reconciled?  Was this original Sin only for Christians and not for the previous generations?

Do Catholics believe that God is not able to forgive Sin?
You've got a couple of questions in your question, so I'm going to try and flesh out original sin.

Original sin is not that God punishes you because of the sins of your parents or anyone else. Ezekiel makes that clear for us:


  18:20 The soul who sins shall die. The son shall not suffer for the
  iniquity of the father, nor the father suffer for the iniquity of the
  son. The righteousness of the righteous shall be upon himself, and the
  wickedness of the wicked shall be upon himself.


Original sin is that you are inherently sinful. Exodus 25 is often used to show inherited sin, however I think that is a misreading:


  You shall not bow down to [idols] or worship them; for I, the LORD
  your God, am a jealous God, punishing the children for the sin of the
  fathers to the third and fourth generation of those who hate me.”


The third and fourth generation are being punished because they still hate God. The parents sin was passed on to the children because children usually mimic what their parents do. If their parents don't worship God, then the kids will (more often than not) also not worship God.

The idea of Original Sin is based on places like Romans 5. It is the concept that because we are human, we are sinful. In Romans 5 we see original sin, that just as one man sinned, we all sin and so we all deserve death.


  Therefore, just as sin came into the world through one man, and death
  through sin, and so death spread to all men because all sinned (5:12)


The Old Testament does mention original sin at least once. It's a great reminder that like our parents are sinful, we too are sinful at birth. From the moment you are born, you are sinful and rightly deserve God's punishment:


  Behold, I was brought forth in iniquity,
      and in sin did my mother conceive me (Psalm 51:5 ESV)


In terms of this comment in your question:


  This Sin is only washed away if one is Baptized, so if a child born
  dies at say 6 months will go to Hell because they have this Sin.
  Psalm 51:5, Romans 3:11, Romans 5:12 (I could go on) all tell us that that 6 month old baby is sinful and deserves death, just like you and I do. To us it seems cruel and unjust, but God is the one being sinned against by that baby, not you or me. That child can be saved through Jesus' death and resurrection. I'm not sure on the Catholic position of infant forgiveness, but the bible teaches that the blood of Jesus is capable of saving anyone.


In terms of your question Do Catholics believe that God is not able to forgive Sin? I would say that Catholics believe that God is able to forgive sin. Forgiveness in the Catholic church is received through baptism, penance, confession, and reconciliation. (I'm not a Catholic, but I think I got that right).