That's a known problem... could've sworn there was a thread about this earlier that I could point you to. Anyhoo...
The only tested and true method of debugging this issue is:
(1) modify the configure.bat file in your kernel project within the Nios II IDE
(2) remove the @start from the beginning of the line in the batch file
(3) open up a
regular command prompt (
not a Nios II SDK Shell)
(3a) run cd ...altera\kits\nios2\bin\eclipse\workspace\<kernel project>
(3b) run configure.bat
You should now be able to view the error messages.
Common issues:
gcc or nios2-elf-gcc not found...
... you may need to run SOPC Builder at least once in order for your Quartus II/SOPC Builder installation to be complete. After running SOPC Builder, try configuring the kernel again
crt0.o not found...
... this is trickier, you need to double check that a crt0.o file exists within the ...quartus/bin/cygwin/usr/lib directory. This is the one that the kernel configuration is trying to link against. If it's there then something is different about your mount points than what we expect it to be. We typically unmount the current /usr/lib if it's mounted, so you may try that from the Nios II SDK Shell before attempting to configure your kernel again.
any other error messages, let me know...