Out-of-the-box, Zen Cart works fine for downloadable products when running on Bluehost.

You should start with a fresh clean install of Zen Cart, then set up a test downloadable product in the clean empty store, and confirm that it can be purchased successfully.
Then commence the process of migrating your old store over. http://www.zen-cart.com/content.php?...fferent-server

You really ought to be upgrading to the latest version of Zen Cart. v1.3.8 is not only obsolete, it also has security problems.