Listing/Linking Taxonomy Terms in a View

I've got a problem here I'm not sure how to solve or if I'm even approaching this correctly. What I have is the following:

Taxonomy = News Sections:

General Interest
Crime
.
.
.
Classified Ads
Automotive
Announcements
.
.
.
etc.

My requirement is to display just classified ad taxonomy terms in a view. This is done and works fine. However, the panel that this view is displayed in receives arguments of state and city. As you can see from the export my classified ads view is set up to receive these arguments, however when the view is run in either preview or page mode it hangs as if in an infinite loop and I get an Error code 0 when I break out.

The final goal of this is to have a listing of classified ad categories that when one is selected it leads to another page where only the ads for that ad section, state and city are displayed. Does this make sense? Any idea where I can go from here (no, I don't want to go THERE)!!!! Anyway, aside from the lame humor, here's the export for you experts!

$view = new view;
$view->name = 'news_classifieds_left';
$view->description = 'Classified Ad categories column 1';
$view->tag = 'custom';
$view->view_php = '';
$view->base_table = 'term_data';
$view->is_cacheable = FALSE;
$view->api_version = 2;
$view->disabled = FALSE; /* Edit this to true to make a default view disabled initially */
$handler = $view->new_display('default', 'Defaults', 'default');
$handler->override_option('relationships', array(
'parent' => array(
'id' => 'parent',
'table' => 'term_hierarchy',
'field' => 'parent',
),
));
$handler->override_option('fields', array(
'name' => array(
'id' => 'name',
'table' => 'term_data',
'field' => 'name',
),
));
$handler->override_option('sorts', array(
'random' => array(
'id' => 'random',
'table' => 'views',
'field' => 'random',
),
));
$handler->override_option('arguments', array(
'name' => array(
'id' => 'name',
'table' => 'term_data',
'field' => 'name',
),
));
$handler->override_option('filters', array(
'vid' => array(
'id' => 'vid',
'table' => 'term_data',
'field' => 'vid',
),
));
$handler->override_option('access', array(
'type' => 'none',
));
$handler->override_option('cache', array(
'type' => 'none',
));
$handler->override_option('offset', 10);
$handler = $view->new_display('panel_pane', 'Classified Ads left column', 'panel_pane_1');
$handler->override_option('relationships', array(
'parent' => array(
'label' => 'Parent',
'required' => 1,
'id' => 'parent',
'table' => 'term_hierarchy',
'field' => 'parent',
'override' => array(
'button' => 'Use default',
),
'relationship' => 'none',
),
));
$handler->override_option('fields', array(
'name' => array(
'label' => '',
'alter' => array(
'alter_text' => 0,
'text' => '',
'make_link' => 0,
'path' => '',
'link_class' => '',
'alt' => '',
'prefix' => '',
'suffix' => '',
'target' => '',
'help' => '',
'trim' => 0,
'max_length' => '',
'word_boundary' => 1,
'ellipsis' => 1,
'html' => 0,
'strip_tags' => 0,
),
'empty' => '',
'hide_empty' => 0,
'empty_zero' => 0,
'link_to_taxonomy' => 1,
'exclude' => 0,
'id' => 'name',
'table' => 'term_data',
'field' => 'name',
'override' => array(
'button' => 'Use default',
),
'relationship' => 'none',
),
));
$handler->override_option('sorts', array(
'name' => array(
'order' => 'ASC',
'id' => 'name',
'table' => 'term_data',
'field' => 'name',
'override' => array(
'button' => 'Use default',
),
'relationship' => 'none',
),
));
$handler->override_option('arguments', array(
'name' => array(
'default_action' => 'ignore',
'style_plugin' => 'default_summary',
'style_options' => array(),
'wildcard' => 'all',
'wildcard_substitution' => 'All',
'title' => '',
'breadcrumb' => '',
'default_argument_type' => 'fixed',
'default_argument' => '',
'validate_type' => 'none',
'validate_fail' => 'not found',
'glossary' => 0,
'limit' => '0',
'case' => 'none',
'path_case' => 'none',
'transform_dash' => 1,
'add_table' => 1,
'require_value' => 0,
'id' => 'name',
'table' => 'term_data',
'field' => 'name',
'validate_user_argument_type' => 'uid',
'validate_user_roles' => array(
'2' => 0,
),
'override' => array(
'button' => 'Use default',
),
'relationship' => 'none',
'default_options_div_prefix' => '',
'default_argument_fixed' => '',
'default_argument_user' => 0,
'default_argument_image_size' => '_original',
'default_argument_php' => '',
'validate_argument_node_type' => array(
'image' => 0,
'panel' => 0,
'book' => 0,
'inline_ad_image' => 0,
'news_article' => 0,
'page' => 0,
'story' => 0,
),
'validate_argument_node_access' => 0,
'validate_argument_nid_type' => 'nid',
'validate_argument_vocabulary' => array(
'3' => 0,
'2' => 0,
'1' => 0,
),
'validate_argument_type' => 'tid',
'validate_argument_transform' => 0,
'validate_user_restrict_roles' => 0,
'validate_argument_node_flag_name' => '*relationship*',
'validate_argument_node_flag_test' => 'flaggable',
'validate_argument_node_flag_id_type' => 'id',
'validate_argument_user_flag_name' => '*relationship*',
'validate_argument_user_flag_test' => 'flaggable',
'validate_argument_user_flag_id_type' => 'id',
'image_size' => array(
'_original' => '_original',
'thumbnail' => 'thumbnail',
'preview' => 'preview',
),
'validate_argument_php' => '',
),
'name_1' => array(
'default_action' => 'ignore',
'style_plugin' => 'default_summary',
'style_options' => array(),
'wildcard' => 'all',
'wildcard_substitution' => 'All',
'title' => '',
'breadcrumb' => '',
'default_argument_type' => 'fixed',
'default_argument' => '',
'validate_type' => 'none',
'validate_fail' => 'not found',
'glossary' => 0,
'limit' => '0',
'case' => 'none',
'path_case' => 'none',
'transform_dash' => 1,
'add_table' => 1,
'require_value' => 0,
'id' => 'name_1',
'table' => 'term_data',
'field' => 'name',
'validate_user_argument_type' => 'uid',
'validate_user_roles' => array(
'2' => 0,
),
'override' => array(
'button' => 'Use default',
),
'relationship' => 'none',
'default_options_div_prefix' => '',
'default_argument_fixed' => '',
'default_argument_user' => 0,
'default_argument_image_size' => '_original',
'default_argument_php' => '',
'validate_argument_node_type' => array(
'image' => 0,
'panel' => 0,
'book' => 0,
'inline_ad_image' => 0,
'news_article' => 0,
'page' => 0,
'story' => 0,
),
'validate_argument_node_access' => 0,
'validate_argument_nid_type' => 'nid',
'validate_argument_vocabulary' => array(
'3' => 0,
'2' => 0,
'1' => 0,
),
'validate_argument_type' => 'tid',
'validate_argument_transform' => 0,
'validate_user_restrict_roles' => 0,
'validate_argument_node_flag_name' => '*relationship*',
'validate_argument_node_flag_test' => 'flaggable',
'validate_argument_node_flag_id_type' => 'id',
'validate_argument_user_flag_name' => '*relationship*',
'validate_argument_user_flag_test' => 'flaggable',
'validate_argument_user_flag_id_type' => 'id',
'image_size' => array(
'_original' => '_original',
'thumbnail' => 'thumbnail',
'preview' => 'preview',
),
'validate_argument_php' => '',
),
));
$handler->override_option('filters', array(
'vid' => array(
'operator' => 'in',
'value' => array(
'2' => '2',
),
'group' => '0',
'exposed' => FALSE,
'expose' => array(
'operator' => FALSE,
'label' => '',
),
'id' => 'vid',
'table' => 'term_data',
'field' => 'vid',
'override' => array(
'button' => 'Use default',
),
'relationship' => 'none',
),
));
$handler->override_option('offset', 0);
$handler->override_option('row_options', array(
'inline' => array(),
'separator' => '',
'hide_empty' => 0,
));
$handler->override_option('pane_title', '');
$handler->override_option('pane_description', '');
$handler->override_option('pane_category', array(
'name' => 'View panes',
'weight' => 0,
));
$handler->override_option('allow', array(
'use_pager' => FALSE,
'items_per_page' => FALSE,
'offset' => FALSE,
'link_to_view' => FALSE,
'more_link' => FALSE,
'path_override' => FALSE,
'title_override' => FALSE,
'exposed_form' => FALSE,
));
$handler->override_option('argument_input', array(
'name' => array(
'type' => 'panel',
'context' => 'token.site-mail',
'context_optional' => 0,
'panel' => '0',
'fixed' => '',
'label' => 'Taxonomy: Term',
),
'name_1' => array(
'type' => 'panel',
'context' => 'token.site-mail',
'context_optional' => 0,
'panel' => '1',
'fixed' => '',
'label' => 'Taxonomy: Term',
),
));
$handler->override_option('link_to_view', 0);
$handler->override_option('inherit_panels_path', 0);

Thanks in advance.