I did a patent search and am pretty sure they do not have a patent or one pending.
Regardless of the quality of patent search, there's a good chance you wouldn't be able to locate a pending app. Apps are not published until 18 months after the filing date, and some are not published at all before they are granted. If there is a pertinent provisional app, that will further delay publishing.
Since the idea or similar product has been published and is being sold would my version be patentable?
US is a first to invent country, so even if your product was identical you still might be able to patent it as long as you could document an earlier date of invention. But that could get messy and bothersome.
It is made from different materials and looks nothing like theirs but the function of the product is the same. Keep in mind they will not be exactly the same. It's a hand crafted item.
You are not providing enough information, and probably shouldn't do so here. The function of the product is the same but what about the means? You use different materials, does your product work differently? You can patent any functional aspect of your "invention" that is considered both novel and non-obvious relative to the prior art.
If they do have a patent on it can they prevent me from making my version in the future?
It depends what their patent covers.
I designed it to be used with a certain company's product. What kind of trouble, if any, can I get into for doing that?
Unless that certain company has a patent that would get in your way - which may be unlikely - the main trouble that you would want to watch out for is in the field of trademark law. The only way this would happen would be if you or your products were to give the impression that you, your company, or your products, were associated or affiliated with their company or its products. Not something to worry about - but something to be aware of.
If I buy that companies product from them and sell it with mine would that eliminate me from any trademark infringement issues?
In line with what is written above, and in lieu of an agreement with the other company, this could actually put you at greater risk of running afoul of trademark law and/or attracting a lawsuit.