Hard lock with Nios 2 cyclone dev board

Hey guys, I'm trying to get to work developing on the nios development kit cyclone edition. The board has a Nios II chip version 1.1 and a Cyclone EP1C20F400C7 FPGA. I am running Quartus II 4.2 Full edition and the Nios II Development Kit 1.1 on Windows 2000 SP4. I have also verified that my COM1 port, serial cable, and USB ports are functional. I am connected to the device with the USB Blaster(which i have installed the drivers for following the getting started guide).

I connected my board step by step as specified in the getting started guide. The board will boot up, goes to safe mode, and starts the web server which i am able to connect to. When i open any of the provided Quartus II projects (standard, low cost, small, full featured) and go to Tools->programmer and use the default .sof Quartus II says the operation was successful, but my board hard locks. The LEDs turn off, the LCD freezes, and all of the segemts on the 7-segment display light up. When I press Power-On reset it tries to read the user data, fails, and reverts to the factory fail safe.

I tried connected through a terminal by typing "nios2-terminal" and it prints out 3 lines in the terminal that say:

nios2-terminal: connected to hardware target using JTAG UART on cable

nios2-terminal: "USB-Blaster [USB=0]", device 1, instance 0

nios2-terminal: (Use the IDE stop button or Ctrl-C to terminate)

but then i get an error that says "nios2-terminal..exe has generated errors and will be closed by windows. You will need to restart the program. An error log has been created" and the system locks up as described above.

Any ideas? I have also tried establishing a serial connection using "nios-run -t -r" and "nios2-terminal -U

--port=/dev/com1". This says that it has connected and started a terminal, but I get no debugging info out on reboot and the Tx and Rx lights never blink. This is all off of the Console port.

Has anyone had this problem getting started or have any idea? Altera's tech support is painfully slow, and this should not be difficult. Thanks for any help!

-jon