I think Mike has this one nailed. Try connecting the gnd pin on the Arduino to your grounding slot on the terminal block. They both need to have the same 0V reference point to get valid data.
I assume you'll want to power it from the 5V regulator anyway, so it might be a good exercise to run the 5V to the Arduino as well. Disconnect it from your FTDI cable when you do this though.
[ninja edit] Don't power the Arduino via the 5V pin. Tying the grounds together shouldn't be an issue, but when you do install this and need external power, use the actual VIN and a 12V line from the Wago. Check the power section here for more info:
http://arduino.cc/en/Main/arduinoBoardEthernet