As we do not have access to the plugin I went to your site to try and see again but I see you are not actually using the theme or even default but a modified one?
<link rel="stylesheet" href="http://freemania.tayloegray.com/blog/
type="text/css" media="screen" />
The problem is Studio just like all our themes uses the same hooks or 'things BuddyPress looks for' as any theme. It also does no redirects or anything fancy like that. I'm therefore puzzled why a link I see in source will be created as a # which is what you are getting. My thoughts do turn to if an error is occuring. We can test this though.
1. In buddypress-navigation.php (library/components/buddypress) just add a link that exists at this point:
<?php do_action( 'bp_nav_items' ); ?>
Make sure it's a proper navigation link to a real place. Then we can see if adding a link in that 'hook' which it seems the plugin uses will have issues or not. If it does not then we know the theme isn't causing redirection.