The system works when configured properly. You said when you entered the SOP that the MO was created properly. First open the MO and make sure it is in Released state. You cannot do a Component Transaction Issue until the MO is released. If the MO is released, from the MO Transaction Entry window with the MO on screen, open the Go To pull down and select pick list. Does anything display there? If not, the BOM was not copied into the order. If there is data, the inability to issue components might have to do with the components in the BOM.
Are the items in the BOM marked to be back flushed or floor stocked? These are not normally seen in the component transaction entry window. There is a check box that will show these item.
Check these and post back.
You might want to check out some of our manufacturing books. Product Engineering discusses building BOMs and Routers properly while Shop Operations discusses the creation, release, processing, and receiving of MOs. They are available on our web site.