I just tried on mine...same results...it will cut felt, but sometimes I have to run it through twice.
I tried with 1.5 inch grosgrain and it made the impression, just like what happened to you. I ran it through twice. Still only impression. I then put another layer of ribbon UNDER the die to make it a tighter fit. Ran it through twice and it cut, but not well at all. I was using a cuttlebug die, a flower one, maybe it was too fancy...perhaps a simple design would work, but I don't have anything simple to try. I only have the flower die.
I feel your pain