This happens when your WP link categories are not set correctly in FWP.
FWP requires you to designate a category that was created in links to be the source for your FWP syndicated links. In the syndication configuration area the first thing you will see is a pulldown for link category, this is what is causing you all the trouble.
I had to create a new category or overhaul an existing one and then everything in there started to syndicate properly.
I was way out of date on my wp install, now I am 2.7 w the latest FWP working fine.
See it here