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Has anyone else experienced this? How can it be fixed?
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I recall seeing this on the "Board Test System" GUI for another kit I was testing. Rather than using the BTS to configure the kit, use Quartus. The configuration images are typically located in a directory in the install area. I don't have this kit, so cannot tell you where, but dig around and you should find a directory with multiple images with names similar to the BTS tests. Once you've configured the board with the appropriate image, start the BTS and click on the appropriate test, and it should detect that the board has the appropriate image loaded, so it will allow the tests.
Cheers,
Dave