Typescript bundling error - cant find imports

Question

I have a node application that compiles typescript files to a dist folder and then serves these files as lambda resolvers via aws cdk. Here is an example of my setup:

The code

register.ts

import ValidateUserFields from '../utils/forms';

export async function main(event: any, context: any) {
    return {
      statusCode: 200,
    };
}

register-lambda-config.ts

import { Construct } from 'constructs';
import * as apigateway from 'aws-cdk-lib/aws-apigateway';
import * as lambda from 'aws-cdk-lib/aws-lambda';
import * as s3 from 'aws-cdk-lib/aws-s3';

export class FrontendService extends Construct {
  constructor(scope: Construct, id: string) {
    super(scope, id);

    const api = new apigateway.RestApi(this, 'frontend-api', {
      restApiName: 'Frontend Service',
      description: 'This service serves the frontend.',
    });

    const functionName = 'register';

    const handler = new lambda.Function(this, functionName, {
      functionName,
      runtime: lambda.Runtime.NODEJS_14_X,
      code: lambda.Code.fromAsset('dist/src/lambda'),
      handler: 'register.main',
    });

    const registerIntegration = new apigateway.LambdaIntegration(handler, {
      requestTemplates: { 'application/json': '{ "statusCode": "200" }' },
    });

    const registerResource = api.root.addResource('register');
    registerResource.addMethod('POST', registerIntegration);
  }
}

tsconfig.json

{
  "compilerOptions": {
    "target": "ES2018",
    "module": "commonjs",
    "moduleResolution": "node",
    "lib": ["es2018"],
    "declaration": true,
    "strict": true,
    "noImplicitAny": false,
    "strictNullChecks": true,
    "noImplicitThis": true,
    "alwaysStrict": true,
    "esModuleInterop": true,
    "noUnusedLocals": false,
    "noUnusedParameters": false,
    "noImplicitReturns": true,
    "noFallthroughCasesInSwitch": false,
    "inlineSourceMap": true,
    "inlineSources": true,
    "experimentalDecorators": true,
    "strictPropertyInitialization": false,
    "outDir": "dist",
    "typeRoots": ["./node_modules/@types"]
  },
  "exclude": ["node_modules", "cdk.out", "./dist/**/*"]
}

The problem

When I run npm run dev it compiles my typescript files to the dist folder in the same structure as what I have in my src folder (where all my typescript files live). I however run into the following error if I have any imports in my register.ts file:

{"errorType":"Runtime.ImportModuleError","errorMessage":"Error: Cannot find module '../utils/forms'\nRequire stack:\n- /var/task/register.js\n- /var/runtime/UserFunction.js\n- /var/runtime/index.js","stack":["Runtime.ImportModuleError: Error: Cannot find module '../utils/forms'","Require stack:","- /var/task/register.js","- /var/runtime/UserFunction.js","- /var/runtime/index.js"," at _loadUserApp (/var/runtime/UserFunction.js:202:13)"," at Object.module.exports.load (/var/runtime/UserFunction.js:242:17)"," at Object. (/var/runtime/index.js:43:30)"," at Module._compile (internal/modules/cjs/loader.js:1085:14)"," at Object.Module._extensions..js (internal/modules/cjs/loader.js:1114:10)"," at Module.load (internal/modules/cjs/loader.js:950:32)"," at Function.Module._load (internal/modules/cjs/loader.js:790:12)"," at Function.executeUserEntryPoint [as runMain] (internal/modules/run_main.js:75:12)"," at internal/main/run_main_module.js:17:47"]}

This happens for imports from relative local files (like '../utils/forms' as shown in the code above) but also for imports from node_modules. When I look into the compiled register.js file in the dist folder I see that it has made an attempt to parse the import:

"use strict";
var __importDefault = (this && this.__importDefault) || function (mod) {
    return (mod && mod.__esModule) ? mod : { "default": mod };
};
Object.defineProperty(exports, "__esModule", { value: true });
const forms_1 = __importDefault(require("../utils/forms"));
const bucketName = process.env.BUCKET;

exports.main = async function (event, context) { ...

however it shows the error message above. I have tried changing the compiler options in tsconfig to "module": "esnext" but this introduces other errors...

Here is a link to the repo: https://easyupload.io/ulnmo4

just do npm i then npm run dev. Then import the following template into Postman to reproduce error: https://pastebin.com/vr3MhR5Q

Any help would be greatly appreciated.