So after much playing around, I was finally able to get it to work. At least, I think so.
The biggest problem I had was getting an ATMel-ICE to work with my Mac. I'm going to buy the Adafruit programmer to make things easier in the future.
Everything seems to be working using the M-Firmware (thank you Markus!). The only think I notice is that it takes several seconds (with a white screen) before it shows the "Component Testor" wording. Then, I noticed that it doesn't always boot correctly. Sometimes, the white screen stays on. Sometimes, I have to hold the encoder button in order to get it to finally respond.
I'm guessing this has something to do with the fuses. I have tried the fuses: (E:FD, H:D9, L:F7) as well as (E:FD, H:D8, L:FF). I'm running a 16Mhz crystal.
Any further assistance is appreciated!