AE blinking yellow but is working

My AirPort Express is only connected to my Stereo setup in the living room.
After receiving a software update it started blinking yellow and wouldn't work.
I try using the Setup Assistant and get this message:
There was an error communicating with your AirPort card. Please make sure it is installed properly and try the AirPort Setup Assistant again.
AirPort works fine with my AP Extreme base station which I use to download movies so it appeared there was nothing wrong with the card. I did a hard reset of the AP Express and downloaded the latest firmware.I still can't use the setup assistant and the yellow light is still blinking,but the Express now works fine.
Any ideas what's going on? Why the erroneous messages and blinking yellow when the unit appears to be working fine?

All this may seem obvious to techies, but it's a big deal to a senior type person.
After much anguish and hand wringing I have my Express showing along with my Extreme in Airport utility in all their green dotted glory. Somehow the firmware update request for 732 that magically appeared (and that I quickly downloaded) managed to change my AirPort network settings. These are some notes I made for myself for reference in the event of future mishaps.
Make sure AirPort is connected by checking in NETWORK - NETWORK STATUS
If not connected click on AIRPORT in drop down menu
If on AUTOMATIC change to PREFERRED NETWORKS
Select name of desired network from list
Open AirPort Utility - see base station(s)on left (if not, do a factory reset)
Click on Manual setup
When asked which base station do you want to connect to, click on Extreme xxxxxx
When asked for password type in Extreme wireless network password-xxxxxxxx
follow any other instructions and click on UPDATE. It will take quite a while to connect to Express - just WAIT. (maybe 3 to 5 minutes). Express will show green and unit will show green.
The key was changing from AUTOMATIC to PREFERRED NETWORKS, and selecting the correct one from the menu shown. I had not had to make this selection in the past. AUTOMATIC had always worked until the update. Oh yes, and forget using SETUP ASSISTANT. It still is indicating something wrong with the AIRPORT card even though everything now is working fine.

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