I check in preferences>audio and everything is checked green. I see the levels reading in the mixer when i touch my keyboard but still no sound. In the reason hardware device it even shows my digi002 and still no sound. Any suggestions ????????

Well you weren't clear on whether you had selected a sound card from the drop down list in Preerences>Audio. That would most likely be the problem.

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And beside this, I'd try to fix the problem rather with running the demo song than with playing with a MIDI keyboard.