What is the vintage of the machine?
Try commanding a G0C0 without the M18 (M18 is redundant on the newer controls). If you do it in MDI, does the green cycle start light illuminate? Does it stay on?
If the green light stays on, leave it on, for 10 minutes or so. If the control THINKS it's moving to C0 but doesn't reach C0 in a specified amount of time, it will alarm out with something like "Cycle Time Too Great".
Has the C axis EVER worked on this machine? Are you positive it HAS a C Axis? If you bought it used, it could only have 1 degree indexing, as full C axis is an option.