<div class="post" id="post-<?php the_ID(); ?>">
<h2><a href="<?php the_permalink() ?>" rel="bookmark" title="Permanent Link to <?php the_title(); ?>"><?php the_title(); ?></a></h2>
I THINK this might be the issue... in comparing it with my index.php file, I found this:
<div class="post">
<h3 id="post-<?php the_ID(); ?>"><a href="<?php the_permalink() ?>" rel="bookmark" title="Permanent Link: <?php the_title(); ?>"><?php the_title(); ?></a></h3>
See how yours puts the id in the div, and mine puts it in the h3? (yours is h2) Try copying mine and replacing yours with it - change the h3 to h2 so that it matches up with your site style. See if this helps? (Again, this is in index.php)
I hope so - my methods of doing things like this are usually by trial and error - so if it doesn't work, put it back the way you had it and we'll keep trying.