sql developer dbms_output not working

I have seen many posts about this issue out in the real word but not found a solution for me.

I am trying to debug some pl/sql using sql developer (V2.1) . I have done 'view/Dbms_output and connected the resulting tab to the correct 'connection' but still I do not see output from my dbms_output.put_line statements. I have also tried putting the 'set serveroutput on' in various places in the code but this just causes a compile failure.

I would like to see the output as I am working with some complex logic and the output statements allow me to see the current status of my code.  When I run the package body I also get the standard: 'ORA-06502: PL/SQL: numeric or value error: character string buffer too small' because whatever window my output is going to is set too small to get the results.