when it comes to PoS coins, cryptsy creates problems with withdrawals.
Mullick has right, it is not a Cryptsy problem. We have some problems with the v1.2.0 with LevelDB support. v1.1.0 work well.
If you need a running client please use 1.1.0 from here:
https://github.com/emarkproject/DEM/releases/tag/1.1.0i tested manual Payout , but Daemon died immeditly
With v1.2.1 same problem like 1.2.0 We have found the error and work on a fix.