Atmel ICE and exploding caps

I continue my attempt to get the Atmel ICE to interface with my Arduino mega2560. I hooked up a new regulated 5VDC power supply (measured output 4.984 VDC) and began trying to get the modified sketch (all Serial.print lins were deleted) loaded into the Arduino when BANG and a puff of smoke came up from one of the system boards. A 2.2µF 35VDC tantalum cap had exploded. I replaced the remains of the cap as well as another that had obviously overheated (the 0.1µF 50V filter caps associated with each IC were unaffected) and put the board on a test stand. The problem was a defective HCT573 IC that had set up an oscillation, overheating the filter cap. Nothing to do with the ICE unit, but it's a cautionary note to check out a board's performance before putting it in service.

Atmel Studio 7 seems to be a pretty nice piece of software, and the ICE board seems to have all the functionality you could ask for, but the documentation is pretty thin. In the project.cppproj file, the device is properly selected as ATmega2560. In the tool tab I've selected the Atmel-ICE debugger with JTAG interface. and everything else has been left at the default settings. The Build was successful, but when selecting "Debug/Start debugging and break" I get

Error: No JTAG devices detected. Debugger command Activate physical failed.

After digging around the intenet for a couple of days I found some 3rd party documentation that showed the pinout of the ICE 6 pin connector - I'm pretty sure it is plugged in correctly - the indexing tab is facing away from the reset button. There are a couple of settings on the Tool tab of the project.ccpproj file that are not clear. Should an external reset be selected - the default is unchecked? The default Programming settings are "Erase entire chip" and "Preserve EEPROM" is checked. That seems correct as the other options don't make any sense.

Could anyone who's had success with the the Atmel-ICE and the Arduino mega2560 board combination provide some guidance?