Same problem here. I’ve gotten the easy and medium badges five times over but no luck. The challenge screen seems to be working fine as I’ve got it 2/3rds done. Light is green on chat. I’m using WinXP SP3 and latest of Firefox 2 with the newest flash player. I might try IE7 but I think its the game and not my computer.
I haven’t completed the game yet for the hard badge, but I’m worried that it won’t work either.