I can see the red lights in the slot, but spits back every bill. I was able to one time get it to take a 1 but sent the change to the coin payout box and not to credit.
The fact that it is trying to accept a bill is an indication that your settings are correct (ignore the fact that it issued change from the hopper rather than posting credits -- that can be changed later), and that your validator works.
As was posted earlier, unless you have a cache of really old bills, your DBV-145 is only going to accept $1 bills. Please ensure that you're only using $1 bills in good condition for the purpose of testing and troubleshooting.
If the machine is currently attempting to accept bills, and if the bezel (the orange "Insert Bills $5 to $100 Face Up") light isn't lighting up, I'd be checking the connections for that light. While the bezel light is useful in diagnosing the working state of the validator, it is not necessary for proper operation. Again, you said that the machine is attempting to accept a bill and is spitting it out (rejecting it). That's a much different scenario than a machine not attempting to take a bill at all.