Same problem. I've tried a bunch of combinations using his example heightmaps and none work. I also tried some earlier revisions and they do not either. I wonder if something changed in the terrain data format.
Maybe try again with a new level. For me it wasnt working several times. Always had to retry from scratch with new level i not made any attempts so far. Dont know why it just worked sometimes. Maybe Celludriel you could have look into this.
