Do you have your Vegas Preview at the same time?

I have tried it with it on and off, no difference.

Have you setup your External Preview for your output?

Yes, it is set to OHCI compliant IEEE 1394/DV.

Do you have a VidCap session open?

No.

Have you a tape in the tape deck?

No.

Do you need to make settings for pass-through to the Monitor?

No. The signal goes directly into the dv deck (via firewire) and out to the monitor.

When have you had this working?

Never had this problem with Vegas before. Been using it professionally for a few years now. Just setup this new computer at home with Vegas yesterday.
The computer specs are fine. Intel Core 2 quad processors, 8GB RAM,
NVIDIA GeForce 9500 GS 512mb graphics card.