So I went ahead and replaced R1 with the 1.2k Ohm resistor and put in a 16.384 MHz crystal and cgminer gives the error:
[2013-08-16 00:41:09] Icarus Detect: Test failed at /dev/ttyUSB2: get 00000000,
should: 000187a2
Any ideas? I'm not the best solderer but it looks like I have everything ok. Also tried flipping the oscillator in case that was it but same thing.