You may not agree with what the military does, but you have to respect them for that reason alone, above all else.

This premise must be rejected. You do NOT have to respect them for that reason alone, and certainly not above all else.

Did Nazi soldiers deserve respect, because they were just following orders and they followed those orders and what options did they really have? Were they not also facing the potential of harsh punishment if they did not?

Not having good alternative options is not an excuse for following orders you know are wrong. Respect is earned when your morality supersedes your orders, despite the potential (and sometimes very real and significant) punishments. Your intentions only get you so far, eventually you need to act or else any remaining respect for you will be gone.