3.3V VCCIO and input voltage is O.K. with Cyclone III, if you consider the necessary precautions against voltage overshoot and keep the allowed maximum ratings. This involves at least source sided serial termination resistances for 3.3V logic signals directed to the Cyclone III. Please consult the respective application notes.
The reported chip damage seems to indicate huge voltage transients, also at VCCINT. I can't determine from a distance, how this can happen in your circuit, but it's surely possible. If I understand right, your mini evaluation board has pin headers connected directly to the Cyclone III pins, without any additional protection. Depending on the connected circuit, I can well imagine that higher energy interferences may enter the board.