It gives an unobvious error message if the cpld is not powered so perhaps it's that?
I've never seen the one you mentioned but mine says something like "Hardware and software mismatch" when the target is not powered on.
I use AtmelISP v6.7 for Windows XP. Never tried v7.3 for later Windows in case that's what you're using.
Are you getting 5V on pins where you'd expect 5V when powered on? As in powered on using the PWR button on the motherboard to bring your PSU out of standby mode? A LED connected to the frontpanel header is useful to see if the board is powered on or off (should have had smd leds on the board...)
At this stage I "usually" verify psu,power,reset and that I am getting correct voltages in places I expect them; 3.3V, 5V, 12V, -12V, -5V