Using two Time Capsules - 2nd as backup drive without internet

Let me explain the setup first:
I have Motorola SurfBoard SBG6580 <-> to this is connected my NEW Time Capsule 3TB via Ethernet
This new 3TB TC provides internet and Time Machine back ups to my iMac and Macbook.
So far everything is good!
Now, I have my older 500GB TC.
I want to use this TC merely as a wireless harddrive for secondary backup (maybe using Time Machine or maybe just as wireless drive where I can manually move files to and from whenever needed).
What I want to do is quite simple. I want to be able to plug this TC into a power source and connect wirelessly to my iMac and Macbook.
Since It was previously being used on the SB6580, I had though that that I would be able to do this painlessly! Simply remove the ethernet cable from the SB6580 and I would have the new TC 3TB provide internet and TM backups and the older 500GB TC as secondary backup device. But once disconnected from SB6580, I can't "see" this old 500GB TC. What am not doing right?
Help is much appreciated.
Thanks

Temporarily, move the old TC to the same room or close proximity to the new TC
Power up the old TC for a few minutes, then hold in the reset button on the back of the device for 8-10 seconds and release. Allow a full minute for the TC to restart to a slow, blinking amber light
Open up AirPort Utility on the Mac
Click on Other WiFi Devices
Click on Time Capsule
The utility will open up and take a minute to analyze things, then announce that the  old TC will be configured to extend the new TC network
Enter a name that you want to use for the old TC.....you can use the same device name that you used before if you wish.....and click Next
The utility will set up everything for you. When you see the message of Setup Complete, click Done
Move the old TC to a location where it can pick up a good quality wireless signal from the new TC.

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