Taxonomy Term Block View Show Nodes For All Terms in Node?
I am not sure for d6, but in d7 you can do it like this(i believe it can be done same way in d6)

In Contextual filters(your Arguments) you need to add Nid like you did, after add new argument has taxonomy term ID and in WHEN THE FILTER VALUE IS NOT AVAILABLE -> provide default value chose not content from URL but PHP code and do this:

You need to load node and get your taxonomy terms from field.

 $node = node_load(arg(1));
  if($node) {
  $field = field_get_items('node', $node, 'field_YOURFIELDNAME');
  if($field) {
      foreach($node-&gt;field_YOURFIELDNAME[LANGUAGE_NONE] as $term) { $terms[] =  $term['tid'];          }
    return implode('+',$terms);
  } 
}
  else { return; }


it will return tids of selected taxonomy terms. But its a d7 way with Views 3.