Attempting to extend wifi w/ Airport Express breaks existing network

I am attempting to wirelessly extend/repeat a Wi-Fi network that is running from a 4th generation time capsule using a 1st Generation N Airport Express (model A1264).
Whenever i configure the airport express to extend the network, it breaks the network. all existing connections get dropped, the SSID is seen but you cannot connect to it.
If i unplug the airport express then everything works fine again.
both units are running the most recent firmware, i have done a factory reset on both units and set them up from scratch again.
i have confirmed i'm using the correct encryption (WPA2) and the proper key/password.
Any ideas? this doesn't make much sense aside from either the time capsule or airport express are defective.
thank you.

Windows.
somehow it magically fixed itself after leaving the airport express unplugged from power for 20 minutes.
after letting it sit unplugged for awhile it worked normally without needing to change any settings.
thanks for your response.

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