The problem is that you erased the calibration data when you selected the "Erase main, information & protected information memory" option. This erased the cal constants. I wrote the oscillator init function in halInit to stop if those constants are erased, which is exactly what is doing. I'm not sure how to rewrite these; you might want to ask on the MSP430 forums. You might be able to get by by copying the values from another kit, but that's a hack.
--Derek