Don't mean to hijack with my first post, but it seems like I have been experiencing similar futility with adding Insteon devices. For some reason, I cannot register any device using the "Start Link" function. I literally hit the button and nothing happens, no popup.
I've resorted to adding devices manually, which worked for one motion sensor, but not for any of the dimmers or switches. The ISY would always respond with "Failed". It was an infuriating hour spent for nothing. Any help would be appreciated.