I put them in the refrigerator to rise over night after step 2.
I'm not familiar with this particular recipe, but usually the cold will slow the yeast.
I also have not ever made that recipe and Stephanie G is correct the cold does retard the yeast, you have to bring them to room temperature and let them rise in a warmish environment in order for the yeast to re-activate. I do refrigerator rise all the time and it takes some time for them to warm and rise after being in a cold refrigerator. I never use a damp towel but cover with an oiled piece of plastic wrap and then cover with a dry towel. Again, I have never made this recipe but with other recipes that is what I do.