Preview disabled in log and capture

I am using Final Cut Pro 7 on the latest iMac i7.

I have a DVCam deck connected to the iMac via a firwire 800 cable.

There is a DV tape with DV footage in the deck.

I am able to control the deck from log and capture but the display is the colour bar window with PREVIEW DISABLED on it.

I have checked and double checked that my settings are correct, that video and audio are selected in capture settings etc etc.

Everything is selected correctly on the deck.

All mu suer preferences and presets are also correct.

I have trashed FCP preferences as well.

The content on the tape is viewable fine on the camera and on an external monitor.

So, in summary:

I am unable to log and capture DV material from the tape even though the deck is controllable from log and capture window.