I had the same problem with the latest builds.

This did not work either: "serial cable hooked to the serial command line 
port" 

Just downgrade to  Debian 7.8 (BeagleBone, BeagleBone Black - 4GB SD) 
2015-03-01 - more info - md5: c848627722b7a5f7bc89791cc8949e3b 
It works like a charm...
(https://debian.beagleboard.org/images/bone-debian-7.8-lxde-4gb-armhf-2015-03-01-4gb.img.xz)

Cheers,
Andrey


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