Hi Ben,
It should be held low with a pulldown and then driven high-- however I doubt it would cause such a hard failure if anything.
Not getting any ACK at all is usually one of: 1) ground pad isn't soldered to ground on the bottom of the part, 2) Wrong address-- the address in the documentation is a full 8-bit address, not a 7-bit address, or 3) Issues with power.
Dave