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Check scenarios 1, 2, 4, 7, 9, and 10. The Confederacy begins each scenario in control of Mexico City, Mexico (actually, in scenario 10, it also has control of Vera Cruz).

Now, I know that technically speaking, Mexico is Southern, but I don't recall it being part of the CSA.

This is as of v1.01.

We'll check this. Probably a problem of flag display: as of early 1862, you should see a French flag in Vera Cruz, and after 1863 in Mexico as well. France is a sub-faction of CSA, hence the confusion (NB: all this is a representation of the French expedition in Mexico 1862-1867)