Next step would be to check the pinout of the IAR JTAG cable to make sure it is the same as the J36 header on the SDK baseboard. The signals names can be found on the SDK schematics page 9.
http://www.logicpd.com/do...lce-app-10_Rev_H.pdf
If they look good, the next step would be to verify the LH79520's required nRESETIN and nTRST timing versus what the IAR outputs. Most JTAG devices allow for timing modifications to be made to the nRESET/nTRST signals to be adaptable to multiple processors.
Have you contacted IAR to find out if they have successfully made their device work with the LH79520 ARM 7 processor?