I ended up figuring this out. When I was using the harmony wizard to create the flirc device, I chose flirc and then typed in xbmc, however I then clicked the "add computer" button instead of the "next" button at the bottom of the screen. This ended up not creating the profile properly. Doing it all over again and choosing next instead of "add computer" made the profile correctly and now it works perfectly!
Also having the same issue. I have a FLIRC running 2.6 firmware, no programming, but bult-in checked off in advanced, and my harmony ultimate setup with "FLIRC" manufacturer and "XBMC" profile, and nothing happens at all. So frustrating - i wonder what's wrong here...