I think your problem is that it does *not* properly detect the device. It says "INF: Device Detected : Generic 52xx" for you.
Below is what I have:
Starting 3rd party flash programming...
GDI: Mtwks Callback(MTWKS_CB_PROJECTACCESS, Section : STARTUP, Entry : SPECIFY_NETWORKCARD_ENABLED, Value : 0, R) => DI_OK
INF: Copyright 2012 P&E Microcomputer Systems,Inc.
INF: Command Line :"C:\Freescale\CW MCU v10.6\eclipse\..\MCU\bin\de.exe" -noni -language en -ORBendPoint giop:tcp:127.0.0.1: -ORBtraceLevel 0
INF: CMD>RE
INF: Initializing.
INF: Device Debug Module : Revision B+
INF: Device Detected : 5225x
INF: Target has been RESET and is active.
INF: CMD>CM C:\Freescale\CW MCU v10.6\MCU\bin\Plugins\support\coldfire\gdi\P&E\freescale_52259_1x32x128k.cfp
INF: Initializing.
INF: Device Debug Module : Revision B+
INF: Device Detected : 5225x
INF: Initialized.
INF: ;version 1.01, 10/01/2008, Copyright P&E Microcomputer Systems, www.pemicro.com [522xx_512k]
INF: ;device Freescale, 52259, 1x32x128k
INF: ;begin_cs device=$00000000, length=$00080000, ram=$10000000
INF: Loading programming algorithm ...
INF: Done.
INF: CMD>EM
INF: Erasing.
INF: Module has been erased.
GDI: Mtwks Callback(MTWKS_CB_PROJECTACCESS, Section : PEDEBUG, Entry : DO_PARTITIONING, Value : HFSUIDFH5390FJIfnsdofnfjsdoiFHSIDO, R) => DI_ERR_NONFATAL
INF: CMD>PM
INF: Programming.
INF: Processing Object File Data ...
INF: .
INF: Programmed.
INF: CMD>VC
INF: Verifying object file CRC-16 to device ranges ...
INF: block 00000000-000002FF ...
INF: Ok.
INF: block 00000400-00000417 ...
INF: Ok.
INF: block 00000420-00021ED7 ...
INF: Ok.
INF: Checksum Verification Successful. (Cumulative CRC-16=$90BC)
INF: CMD>RE
INF: Initializing.
INF: Device Debug Module : Revision B+
INF: Device Detected : 5225x
INF: Target has been RESET and is active.
Below are screenshots of my settings. Can you verify them?



Erich