Can't get a hole to show up in this shape! Advice?

Question

I'm using Illustrator CS5 on Vista 64.
I've been using Illustrator for years, but this one thing always stumps me. I have a shape (the letter R) that I need to put a hole in. It is made of a photo trimmed into a compound shape. In the Pathfinder tool I can't get the Expand option to activate.
Here is a screenshot:
http://www.flickr.com/photos/suehawkins/6938092275/
I have tried everything I can think of and can't get the hole to show up! I'm sure it must be obvious, but what am I missing?? I've been trying to use the Pathfinder tool; I need to learn to retain this trick. *sheesh*
Thank you all for reading this - any help you could give would be most awesome!
---sue h

Answer 1

Hi Sue...not Steve here...
You don't need to lock the image first, but it can aid in not selecting it for a bit.
Lock the image.
Create a rectangle covering the whole image.
Place the shape, or text, for the hole you want onto the image.
  If text, make it an outline.
Select both shapes or the rectangle that is over the entire image and the object you want to produce the "hole" in the image with and make a Compound Path (Object > Compound Path > Make or Cmd+8 or Ctrl+8).
Unlock the image and select both the image and the compound path, then make a mask (Object > Clipping Mask > Make or Cmd+7 or Ctrl+7).
Take care, Mike