Hi, I'm trying to run this lab from the ISCW Lab portfolio:

I was able to get SDM working before in a simpler lab (using same IOS) in which the host was connected to a router via the dyanamip emulated switch. However, this lab configuration is such that SDM is to connection to s0/0/0 in router HQ.
I setup HQ to allow SDM connection, added in all the route through loopback on my window host etc, but I'm getting stuck at this screen:

So I'm pretty sure that I'm able to make a connection from SDM to 192.168.12.2, but somehow it is getting stuck. Anyone else able to do this lab and ran into (and hopefully solve) this issue?
Edit - I did a packet capture on the loopback and I do see the devices are trying to communicate. Attached packet capture for wireshark pros. :P
packet capture ->
SDMtimeout.pcap