I have been having this very same issue. Links simply reload the directory page over and over again.
I have this plugin up and running in another blog and all settings are the same. But this one just will not work.
http://www.scifislacker.com/portal/
I have uninstalled and reinstalled the plugin twice and have updated permalinks MANY times.
I did recently update all WP files but this is not an issue on the other blog (both hosted with same company on same server). Plus I had this issue before updating the WP files.
Any other suggestions, besides looking for an alternate solution?