New iPod Touch 4th gen. cannot connect to home wi-fi network

When I launch wi-fi on my new iPod Touch 4th gen. my home network's name is displayed, but after entering my password the iPod is unable to connect - the wheel to the left of the network name just keeps spinning.   The network still functions properly for all my other devices (MacBook, 2nd gen. iPod Touch, wireless printer and my wife's PC) and the new iPod Touch did connect to the network in the Apple Store when I visited yesterday.   I know the password I enetered for my home network is correct because I've checked it in my keychain, and also the iPod did not inform me that it was the wrong password for that network - as it does if I enter another password.
I have followed the advice given to others - unplugging the Time Capsule and leaving it for 5 minutes, checking that all my software and firmware is up to date, 'forgetting' the network on my new iPod then searching for it again, and have completely restored the iPod - but it still cannot connect to my network.   If my network is functioning properly, and my new iPod was capable of joining the Apple Store's network yesterday, and I am sure that I am entering the correct password, it seems to me that my problem must be due to some network setting that is refusing to allow a new device to connect.   I can't find where that setting might be - can anyone advise?

depending on what router but hopefully all routers came to this default address....
>Setup of the Basic Setup you goto
also had an idea when i wanna make sure im typing the right one, i would do is tap each letter/# by 1, as in,
here's my ipod 4 and my ipod 2, the pswd is 123456
ipod 4, i press 1
ipod 2, i press 1
ipod 4, i press 2
ipod 2, i press 2
and so on till i reach both of them to 6 (1by1) to make sure i get it in there right. saw this on another wall it might depends on what channel your using, but i dont rly think that matters bc i have mine on auto and nvr had a problem.
i would do this even thou it may sound crazy to others....if i were you this is what i would do
on your ipod 2Gen
>address to
-(wireless security settings for passcode)
>tap the box for the password, whatever ur security is i would copy
-copy phrase key and Key 1
-copy phrase key
>open Notepad
>under iCloud account Notepad
>Paste the Key
>either on your pc/mac or your 2nd Gen, go back to
>change your Security Mode to Disable
>goto your 4 Gen iPod Touch
>goto settings and connect to it, if pswd is still in it then tap forget this network and reconnect to it
-once connected and got IP adresses
>goto Notpad under iCloud
-you should have obtained your recent icloud msgs included the key you pasted
-once obtained
>gobk to pc/mac or ipod 2nd gen and re enabled the security and re-paste the key in
-once router adjusted try to connect to it
>1st do your 2nd gen and forget this network reconnect to it and repaste the key
>2nd goto ur 4rth gen from your notes, highlight the key in ur notpad and tap copy and forget this network reconnect to it and paste the key.
this should work bc i did it myself when i couldnt get connected bc thats almost the same steps i did.
somtimes i put my name up on here. remeber these names we put as our nickname doesnt mean its our real name or anything like that,

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