Zone Rates shipping not working

[raydona]

Hi,
 Can someone please help me. Under Modules/Shipping I have set up Zone Rates. I have:
Zone 1 Countries
GB
Zone 1 Shipping Table
2.21:3.20,4.41:5.45,11.1:15.85
Zone 2 Countries
HU
Zone 2 Shipping Table
1.11:5.15,1.66:6.60,2.21:8.05
Zone 3 Countries
TR
Zone 3 Shipping Table
1.11:7.45,1.66:10.15,2.21:12.85

At present I am using Sandbox account. If I set up a fictitious account for United Kingdom sale and payment go through. But if I set up a fictitous account for Hungary I get following:

Error Shipping is currently not available for the selected shipping address. Please select or create a new shipping address to use with your purchase.
  I am unable to create a new address inside Hungary.
Delivery Information
New Shipping Address
Please select a state from the States pull down menu.
 I am asked to select a state from the States pull down menu. It's a small empty drop down list where you can't enter anything, and unless this is filled in a new address cannot be created. I have searched and searched on the internet for a solution but just can't find one. Can anybody please help.