BuddyPress.org

The fact that, as you say, “everything works lovely” when you switch to the bp-default theme, indicates that BuddyPress is functioning properly. So, you have an issue with your custom theme.

Any WP theme will work as a BP home theme as long as some additional files are included. With v1.1 of BP, basically the version you downloaded from trunk, BP switches to a parent/child theme architecture. So, you need to make sure the custom theme you are using can function as a parent theme.

Look at the various files in the BP parent theme — bp-sn-framework. My guess is that your custom theme is missing many of those files.

More information of the new parent/child theme architecture: https://buddypress.org/forums/topic/details-about-the-new-theme-architecture