My guess is that you forgot to make the LED pin into an output in the setup function.
So you were right that there was something funky going on in the setup and I got it working but just out of curiosity I was wondering if you could add some insight to why this code below that I found on the Arduino site under ForLoop was causing the issue.
for (int thispin = 2; thispin > 13;thispin++){
pinMode(thispin, OUTPUT);
}
I found this code here:
http://arduino.cc/en/Tutorial/ForLoopMy understanding was that this code put in the setup section would pins 2-13 into outputs. When I replaced it with this more unwieldy code it fixed everything:
pinMode(2, OUTPUT);
pinMode(3, OUTPUT);
pinMode(4, OUTPUT);
pinMode(5, OUTPUT);
pinMode(6, OUTPUT);
pinMode(7, OUTPUT);
pinMode(8, OUTPUT);
pinMode(9, OUTPUT);
pinMode(10, OUTPUT);
pinMode(11, OUTPUT);
pinMode(12, OUTPUT);
pinMode(13, OUTPUT);
Any idea what was happening?