Yup... you're right, your rc file is definitely clean... looks downright... standard. http://forum.niosforum.com/work2/style_emoticons/<#EMO_DIR#>/smile.gif
From the symptoms you're describing, I'm definitely more inclined to agree with you. Some things that you may want to try if possible:
(1) Try a different ByteblasterMV or USB-Blaster cable and see if the symptoms persist
(2) Switch over to using a Serial DB9 connection for your console
Since you're on a custom board, I have no idea if the above is applicable or even possible. But I'll hope that you'll give it a try. Buys me some time to think about the issue.
http://forum.niosforum.com/work2/style_emoticons/<#EMO_DIR#>/smile.gif