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Did the "Run as admin" solve your problem?
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NO! I gave up on that problem and stopped trying to use the debugger. I have to run my Nios II code out of external flash memory, so I can't really use the debugger anyway. Plus it just adds another layer of uncertainty (and aggravation) to the debugging process. Instead I insert printf() statements at key locations in the code to monitor the software.
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Ive seen some posts where the problem has gone away when people have edited thier .gdbinit file. However, I dont know how to edit it. What paths do I set?
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I don't think you really need a .gdbinit file, but I don't know for sure.