Are third party endoresements allowed at the ATM? I thought i read somewhere that they weren't but now I can't find anything.

This would be determined by you ATM network's operating rules for ATM deposits for non-proprietary deposits, and your own bank's policy for deposits made by your own customers using your ATMs.

My network processor requires that I call the issuing institution and ask if they wish to accept the deposit as endorsed, or reject it and process an adjustment. For our own deposits the question is, "Would you accept this deposit if it were presented at the teller line?"