New node doesn't get added to Node Reference field

I am doing the following:

1. click "Add New" link
2. create new node and hit "Save"
3. I get confirmation message that the node has been created
4. I close the confirmation message

I feel like I'm doing everything correct, but when I look for the newly created node in the drop-down field, it is not there.

I originally installed version 6.x-1.0. The module worked like it was supposed to a couple of times, and then the behavior above kicked in. So I upgraded to 6.x-2.0-alpha1 but I get the same behavior.

Thanks for any and all help on this.