Airport Extreme 1st generation not connecting to internet via PPPoE.

The Extreme is replacing an existing Airport Express which successfully connects to the internet. I reset the Airport Extreme to the factory settings and started from there. The internet provider requires it be setup using PPPoE. I've tried several times to set up a new wireless network but the Airport Extreme isn't connecting to the internet, can't find DNS servers. I contacted the internet provider and confirmed that all settings/usernames/passwords are correct. I cycled the power on the DSL modem, unplugging it for several minutes a few times. Finally I took the whole setup to the local Genius Bar. Since they couldn't setup a PPPoE network there, the Apple Tech set up the Extreme using DHCP so we know it works. He suggested that I try replacing the wireless network instead of setting up a new network. I came home and tried that to the same results: no DNS servers and PPPoe not connecting to the internet. Everything in the Extreme is exactly the same as the Express except the Express works and the Extreme doesn't. What am I missing?
Some background:
I purchased and used the Extreme in the US. Now trying to connect it to my MacBook in Canada. I did change the setting in the Extreme to "Canada"
I just the computer to 10.6.8. I ran the Disk Utility to repair the disk permissions several times.

If you temporarily connect the modem directly to your MacBook and set up a PPPoE connection on your Mac as a test......can it connect to the Internet that way?

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