Airport Express not recognized in iTunes- reset not working.

I have spent 2 days trying everything I've read here in these forums to RESET my Express.
I've done a soft & a hard reset each several times.
I've tried unplugging the Express overnight.
I've upoaded new firmware.
I've discarded the new file created each time in the Airport configuration folder.
The reset seems to work....but then my Express is not connecting to iTunes. That is the new config shows up in the pop up menu in iTunes but does not complete the connection. I only use the box for remote connection of my music system. I've tried to set the Express up with each of the 2 choices in the AirPort Setup Assistant, ie. extending the range or a new network. Also, the light which is normally not flashing is indeed flashing. I've had Express functioning fine for over a year, this issue has happened only once before. Last time I was able to reconfigure successfully. Any ideas would be greatly appreciated.
My set up is as follows:
G4 destop with Airport base station, iBook wireless which I'm using to config. the Express box.

To set up the AirPort Express Base Station (AX) as a "Wireless Client," using the AirPort Admin Utility, connect your computer directly (using an Ethernet cable) to the Ethernet port of the AX, and then, try these settings:
AirPort tab
- Base Station Name: <whatever you wish or use the default>
- Wireless Mode: Join an Existing Wireless Network (Wireless Client)
- Wireless Network: <type in your wireless network name or select it from the pop-up menu>
- Wireless Security: Not enabled
OR, if you are using security on your wireless network:
Security Options
Change Wireless Security
- Wireless Security: <Select the appropriate level of security for your wireless network: 40-bit WEP|128-bit WEP | WPA Personal | WPA Enterprise>
- Password: <enter your wireless network security password or key>
Music tab (optional)
- Enable AirTunes on this base station (checked)
- iTunes Speaker Name: <enter name of speaker for iTunes remote speaker list>

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    Message was edited by: -MTL-

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    ===============================================================================
    OMG!!! You are da man!!!
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    ===============================================================================

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