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What you are describing seems like the Flash Security settings are preventing things. See if the tutorial linked below helps with that.
Note that you typically need to choose the folder where the Captivate output is located.
Click here to view the tutorial
Thanks so much for the quick reply Rick but...
Nope... I have done that for all of the folders I use including the Preloaders folder. If I use any other of the predone Loaders or turn that off completely it works fine.
I actually copied the green circle default preloader and added my text to it...