Here is the version I'm on v0.10.12.29-gf7b7e35-beta
I typed Darksend auto and this is what showed up in the debug log file:
2014-08-15 17:17:03 DoAutomaticDenominating : No funds detected in need of denominating (2)
Same here..
OK, it's working now.. Win7 x64, 0.10.12.31, 1 round

I just set the "Amount of Darkcoin to keep anonymized" over the "Total Balance"
I'll test with higher number of rounds and let you know..
EDIT: Funny.. setting rounds from 1 to 4 made my anonymized amount disappear.. and the game starts again

4 rounds done. Everything seems OK!