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Spatial correlation in lme

In addition to Ben's remark.....

1. You did not specify a nugget
2. Is there any correlation between some of your covariates and X or Y?
3. You may want to make a sample variogram of your residuals....and then 
choose starting values for the range and nugget.
It may even be an option to chose fixed values for these parameters in 
the variogram. See ?corRatio
This helps quite often.
4. You realise that the spatial correlation is being imposed inside the 
random effect? Makes sense for your data....unless these birdies 
interaction.

Alain