I had the same issue and I got this response from Sugr tech support. It fixed it right away:
Please help to download the App version from this link: http://fir.im/sugrtest
And then try to do the chirping process again. It should the very old hardware problem, the new App version is not compatible with
the old one. Once this time works fine, then you can update the Hardware to the newest one,which wont have the compatible problem
with future updated App version again.
The only thing they forgot to mention is that once you install the old version of the app the iPhone might display a message about "untrusted developer." In order to fix that error follow the instructions at the end of this video: