Dear phoenix_fire,
The log file provided shows that the BDM is connecting correctly and appears to be working. (Some of the messages are a bit misleading - the "bdm_usb_recv_epIn() - Error Return 28 (Target reported - Error terminated bus cycle):" is the expected response when the BDM polls a running target.
The error message you quote is independent of the BDM. It indicates that the image load address is not within the Flash - it's actually in the RAM!
The only way I could get a similar message was to miss-configure the launch setup. In particular by configuring the Internal Flash launch to try programming the wrong elf file from the RAM build. This produces an almost identical error message.
I suggest you set you set up a new project with all default options including the actual program to load. You should not need to change any options for this to work (apart from the debug option if you want logging). If this works then its some option that was accidently changed when trying to find the original problem.
If this doesn't work, could you export the project from eclipse and post the resulting ZIP file for me to try to reproduce the problem.
bye