Problem running Maschine MK2 in Sonar X1

I'm having trouble running Maschine MK2 in Sonar X1.  The audio engine is stopping. 
 
I have a project open, with Maschine as my soft synth in an instrument track.  I have a MIDI track set up with channel 1 input from Maschine.  When I arm a MIDI track and press record, Sonar tells me that "The audio engine has stopped unexpectedly".  The audio stops during the metronome count-in, before I press any pads on the controller.  I have no other tracks in the project, just these two.
 
It doesn't matter what I set the latency to.  The longer I set the mixing latency, the quicker the audio engine stops (after pressing record). 
 
In the Maschine window, I have set group A, "Sound MIDI Batch Setup" to "Sounds to MIDI Notes" channel 1.
 
My other controllers and soft-synths work in Sonar X1.  I've also ran this MK2 in Pro-tools (same computer).  I have a new I5 laptop, Win 8, 64bit.  I'm running Sonar X1 LE 32bit.  Any advice would be appreciated.

Thanks jwh, that is a good video.  I've watched it several times.  I think I have the basic settings right, but when I hit record my audio stops.  I don't know if it's a Sonar issue or a Maschine issue.

I tried setting the DropoutMsec to 500 and 750.  The audio engine stops at the third metronome count in, before the recording begins.
 
Since there is nothing being processed, no audio and no midi data in my project (yet), I think I have a more fundamental problem.