Custom Zone No Longer Working?

[addix]

I offer free delivery to employees of the company I work for. What I did was set up a custom zone (SwRI) and set up the flat rate module for $0 shipping and set it to the 'SwRI' Zone. It used to work fine...if they entered 'SwRI' as their state, the option for free delivery would appear in checkout.

Now suddenly it isn't working anymore. Everything seems to still be set up the same as far as the zone and shipping module, but the custom zone is just ignored during checkout and it only displays the standard shipping methods.

I also tried turning on the store pick-up module and setting the zone to SwRI and that didn't work either.

I recently upgraded from 1.2.6 to version 1.3.0.2.

Any ideas? I have a customer trying to place an order, but can't because it keeps charging her for shipping.

Thanks!
Rachel