Orders not showing up - Cancelled status upon order

So I am having an issue with my cc processor so I turned on cash on delivery and am taking off line payments. When orders are placed upon testing, they do not show up and when I go look for them they are set to cancel. No email is sent also, until I set it to processed.. I checked the settings and everything is set to pending or procesing. I've searched the forums and saw a few posts, but those things don't help me at all.. Any other ideas?

Set those purchases as pending only, instead of processing.