DKB MegAChip works in a CDTV without modification. Just like it does in a 1Mbyte CHIP RAM A500. The manual tells you to skip over all cutting traces if your Amiga has 1Mbyte CHIP RAM.
Remove Agnus. Put MegAchip in its place with correct orientation. Connect flying lead to either Gary pin 36 or 68000 pin 48.
I would imagine you are either connecting the flying lead to the wrong pin on the Gary / 68000 or the unit is broken.
Which Kickstart do you have? KS3.1 v40.63?
What tool are you using to verify you have only 1Mbyte CHIP RAM?