Yeah, it sounds as thought that theme is definitely the problem.
Ig you don’t feel comfortable “repairing” the theme (which could be difficult if you are not used to such things or are unfamiliar with editing PHP files) there are a couple of approached you could take:
Go directly to the WordPress Database in PhpMyAdmin and edit the table to change the theme back to one that yo know works.
If you don’t yet have a lot of data in your blog (just setting up) deleting the whole thing and re-installing might actually be easier and quicker for you.
If this theme was one that was installed by the “one-click” installer, you night want to drop DH tech support a note to let them know that it is not compatible with the latest WordPress now being installed.
Of course, if it is a theme you install d yourself, there is no reason to do that.