Ok, you have the correct IP address then, that's one thing crossed off the list.
But immediately after you see the "started up ok" you should see a lot more stuff flash past in that space, or one of the two messages in my previous post. As you didn't say, I assume you didn't see either of those red messages, or the green "log on ok" message you should see.
What it's doing between saying "started up ok", and the next text which is "log on ok" is attempting to log on to the NAS. That is, it sends a http request to the login page of the NAS (the same one you see when you click that picture). It then waits up to the value in the "timeout" settings field for a response, and then displays one of the red messages or the green one depending on what, if anything, comes back.
I just re-tested all of this this, and it all works fine on my system.
The only thing between the messages you should be seeing is a XMLHttpRequest() to log on to the NAS. This completes "asynchronously", in one of the ways described above. If you see nothing, that suggests that the timeout is not "going off", and also that the request is not completing. It seems unlikely that both of those things would coincidentally fail; it's more likely that the request is not being made in the first place. However I can't imagine what may cause that.
Feel free to email me - if you can be bothered then it may be best to persue this off-line as it does not seem to be a general issue.
Things to try/ questions / ideas:
(1) Make sure you have the latest version of the device, and that the "version check" is working.
(2) Uninstall and then reinstall the gadget from the download; it may be that it's damaged somehow.
(3) Are there any things on your machine like anti-virus software other than the standard MS Defender?
(4) The Gadget framework uses IE7 to provide the HTTP communications. You could try resetting the security and caching levels in IE to the default. The gadget punches through the cache on my machine in tests, but it's worth a try.
(5) Are you running any local proxies (eg Privoxy etc)?
(6) I assume pressing the green "refresh" button does nothing at all, and also pressing the "Nas Monitor" title (which reloads the thing) does nothing.
Ultimately you may need to install and run Dbgview and then Fiddler2 so you can watch the traffic going by, but it depends obviously if you can be bothered to do that. I'm pretty sure there's nothing in the gadget which is causing this - it's something on your machine. Once you find it, I can maybe code around it, depending on what it is.