The schematic looks correct.
It seems very odd that there wouldn't be any activity on the DCLK line. I would suggest monitoring other lines, such as nSTATUS for activity. I would expect nSTATUS to change independent of MSEL. A review of how you are looking at the signals may also be productive. ie: The signals are toggling but not being detected.
The application of LED's on U51 seems odd. First, the polarity of the LED's test appear backwards. Next, no current limiting resistors. Lastly, what use are they in general?
Another potential issue may be in the selection of the correct EPCS1SI8N. There appears to be 2 speed grades, 20 and 40 MHz. The Cyclone three needs the 40 MHz version. I'm still sorting out how to distinguish between the two version with the markings on my devices. See PCN0514.