First, make sure at the login window you see the green dot that says Network accounts are available.
Here are my quick notes for adding a new user in OD:
Click New User > Set Password > Make Home Directory like other users i.e. /Users (because if you use a home folder other than local it can get ugly) > Click Save > Click Create Home Directory Now > Click Save and all should work.
From your notes it sounds like the home directory is not set up correctly, be sure to highlight the correct path and click Create Home Directory Now.