ep2c20 and nios problem

Hello,

I'm trying get Nios running on an EP2C20 board. I can configure my board using ByteBlaster II but not USB blaster. Oscilloscope does not show any under/overshoot or noise in clock or data lines. Clock waveform looks strange with USB blaster. First voltage rises to 3.3v but immediately drops to about 2 volts. I have tested with two USB blasters with same result. The odd thing is that our EP2C70 boards configure properly with USB blaster and ByteBlaster.

When I switched back to ByteBlaster I was able to configure EP2C20 with a simple design and verify operation both with signal tap and oscilloscope. Problem is that when I add Nios to design it no longer functions as it should. I can't connect with SignalTap and debugger shows error messages that it can not collect thread information. I try to run just a simple application that continuosly toggles one PIO pin. With oscilloscope I can see that my simple test logic is up and running but nothing is happening on the pin that nios should be controlling.

Any ideas what could cause these problems?