Bad chips?

Hi all,
There are so many categories on here that I wasn't sure where to post this so forgive me if it's not in the right spot. I'm working with a local community college and I, my fellow students, and even my teacher are stumped (my teacher told me to come here) and need some guidance. We are building from scratch a variation of the Simon Says game. We already have a couple of revisions that all use an Arduino Mega 2560 attached via headers to a circuit board. We've built a third revision that uses an Atmega1284P standalone chip. The problem is, we cannot test this revision because we cannot download the code to the chip. We are using an Arduino USB-Serial Light Adapter for USB communication. The RX light on the chip flashes 3 times and then we get a "not in sync" error from avrdude. I googled the error and saw that sometimes it appears when the RESET pin isn't connected to the USB chip. But I ohmed it and it is connected. I held down the RESET button that we have on the board before uploading the code but it didn't help either. I saw on one page that there needs to be a 100 NF cap between EXT RESET on the USB-SERIAL and the RESET pin on the chip. Installed that, still no change.
We thought it was the chip on the board, so we built a simple circuit consisting of another brand new 1284P on a breadboard. We thought our problem could have been the USB chip. So we connected the USB-Serial to our test circuit on the breadboard and it still would not transfer a program. It still acts like it's dead. However the bootloader seems to transfer fine (as in no errors), although the LED we put on pin 1 does not flash to indicate a successful transfer.
I've tested the USB chip by looping the RX/TX pins together, outputting data through a terminal application to see the data come back. Works fine.
We thought we could've had the RX/TX pins backwards between chip and USB-Serial. Turns out we did. We corrected it (TX/RX, RX/TX) and it still won't work.
I also tried downloading a program to it via a brand new AVRisp mkII programmer and AVR Studio 6. AVR Studio 6 always complains about the voltage being too low, and the program will not transfer. Checked the voltage with a multimeter and it is fine.
We've tried changing the baud rate from 9600 to 2400, and even tried 57600.
Our breadboard circuit has an oscillator connected to the XTAL pins to rule out the possibility of CKSEL bits being set to external clock mode.
Tried to download the program to the chip from different computers to rule out configuration issues.
We've done everything we can think of. Does anyone have a clue? The only thing we can think now are bad chips. But two bad chips??
Thank you so much for your help.

Which m1284 add-on code are you using? AFAIK, the most popular ones assume a version of Optiboot in the 1284 as bootloader, and that will operate at 115200bps.
The "voltage too low" using the mkII may be to inappropriate wiring of the ISP connection; many programmers will provide power via the ISP connector, which is not always a good thing, so the VCC pin may be left connected. The Atmel programmers tend to use the VCC pin to SENSE the operating voltage (they do NOT provide "power"), and may be unhappy with an unconnected pin.

With Atmel MKii, you must provide the power on ICSP pin 2 for the MKii to sense the levels to use.

Probably the wrong baud rate.

Look in your boards.txt file, you can edit the baud rate there. Try some different ones.