MJ... open up the shader code and look for a line in the first pass vertex shader function that looks like this...

float LightRange = 0.00some value;

try changing it to float LightRange = 0.00001;

i think this line determines the light falloff... and it may be a set a lil
high, causing the light to drop off before it reaches your normalmapped object.

also, make sure that the no fog property is set... and that you have a light emiiter object...

i hope this is of some help... i'm not the expert on this... just passing on
some stuff i struggled with that might not be so obvious...

good luck

--Mike