If you are getting a 'DV in' message on your camera then the camera knows the PC is there.
The problem seems to be that Premiere doesn't know its there - or isn't looking for it.
I don't have the benefit of having the program open in front of me at the moment, but if you go into Project Settings > General > Playback settings, you should see the settings for showing playback on your DV hardware (camera). Are the settings configured correctly? I remember there being an option of scrubbing output to DV device etc.
Failing that, I would try rebooting, switch the camera on (in Playback mode, attached to the PC), and THEN load Premiere.
If you still have no joy then I'd try the camera (and cable) on someone elses system. Alternatively, use another program that utilises the DV in features on your camera - eg. try using WinDV (
http://windv.mourek.cz/) to feed an AVI file to your camera.
If it works OK with Win DV, or on another PC but not on yours, then try re-installing Premiere.
PS - Just a thought, but your project's editing mode is DV PAL, right? (Project Settings > General>Editing Mode)