Things have changed with v1.0. I would like to help you get the bug out of this if we can. The code looks ok, but that can be deceiving. Add a couple serial outputs to the code.
digitalWrite(5, LOW);//SPI select RFID reader
Serial.println("Start NFC read");
tagId = nfc.readPassiveTargetID(PN532_MIFARE_ISO14443A);
Serial.println("End NFC read");
digitalWrite(5, HIGH);//SPI deselect RFID reader
Now what is the last message?