I can think of two things to do.

1) Completely uninstall D2 and do a fresh install. Without connecting to b.net, apply the 1.10 upgrade, then apply the HU 1.2 upgrade. If you want access to bnet, too, then make two folders as I mentioned.

2) Regiister for the HU forums and ask for help in Tech Support (read the stickies, but I pretty much covered everything there). I was having the same problem at first, but after doing what I told you, I don't know why it isn't working for you (I had the wrong version).