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I doubt that the explanation is right. 10k pull-down is the Altera recommended value, and I have used it in many designs without problems. I also don't think that the dedicated nCE pin has a pull-up. If Altera didn't change the Cyclone chip (rather unlikely), there's probably a short to another I/O pin (with weak pull-up) in your design or a damaged nCE input.
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I would have to agree it sounds funny. I have also used the 10K pulldown on many designs, but most of these designs had the connector for directly programming the EPCSx chip, not using the JTAG indirect. In addition, I have two boards that would not program, which were soldered by an exceptional technician. But when I changed the pulldown, I was able to program the chips.