Digital Desktop Cinema Display Preview Video Not Playing

I can't get the Digital Desktop Cinema Display to work on either a 2nd display or on the main display. The audio plays correctly and the video will update to the current frame when stopped, but no playing video. I have "All frames" selected. In "Single Frames", the screen just stays black while the audio plays.

I have done a clean install of Lion and reinstalled FCP with the update to 7.0.3. I have a Matrox MXO, but so far have left in out of the new clean install.

I have deleted the preferences, repaired permissions, check the disk, emptied the trash and restarted. Mirror on desktop unchecked. I believe that these are all the suggestions from previous posts.

Suggestions?

Configuration:

FCP 7.0.3

Mac OS 10.7.3

MBP 2.6 GHz Intel Core 2 Duo

4 GB Ram

750 GB disk, measures at about 80-100 mB/s with AJA tool.

NVIDIA GeForce 8600M GT 512 MB

One clip in timeline, both ProRes Proxy.

Rick Llewellyn