Having trouble setting up Time capsule...

Question

I just bought a new iMac last night. I also picked up Time Capsule and Apple TV. I'm having a problem setting up Time Capsule correctly. I'll go through what I did step by step and hopefully someone can help me as I've never tried to set up a wireless network before.
I'm connected to the internet via Comcast. I have the outside cable coming into the modem and the ethernet cable from the modem i have plugged into TC's WAN port (the one with the gear logo).
I start by opening Airport Utility ( I upgraded to the most recent version using the install disc that came with TC) and it recognizes TC in the left side of the window. It says it found TC with default settings and gives a name for it and an Airport ID. I click continue.
The next window prompts me to name the TC and assign a password. I do so and click continue.
The next window gives me some options about setting up a new or existing wireless network. It says it found some existing networks which I assume are my neighbors. I select "I don't have a wireless network and want to create one". I click continue.
The next window prompts me to give a name and security level to the new network. I provide a name and select WPA/WPA2 Personal and enter and verify a password. I click continue.
The next window asks whether I'd like TC to be in Bridge mode or Share a single IP address using DHCP and NAT.
If I click Share a single IP, a popup tells me "This will cause my TC to continue to blink amber and do I want to ignore this and continue?". So I figure this can't be a good thing and I click on Bridge mode not really knowing what it means.
The next window asks me to enter the TCP/IP info from my ISP. It also says to choose "Using DHCP" if I receive an IP address automatically. So in the box where it says "Configure IPv4", I select "Using DHCP" and there is an IP address and Subnet mask with numbers after each. Below that is Router Address, with fields for DNS Server, Domain Name and DHCP Client ID. These fields are blank. I click continue.
The next window says TC will use these settings:
TC name - Jim's Time Capsule
Wireless Mode - Create a wireless network
Network Name - Jim's Network
Wireless Security - WPA/WPA2 Personal
Connect Using - Ethernet
Configure IPv4 - Using DHCP
IP Address - (Provided Automatically)
If settings are correct, click Update to finish setting up your TC or click Go Back to change settings. I click Update and a box tells me that the device and its network service will be temporarily unavailable and do I want to continue? I click continue.
The next window tells me that the settings for TC have been updated successfully and its being configured. I then get a window reporting a problem.It says-
"Problem 1 of 1: Internet Connection
Your Apple wireless device does not have a valid IP address. Make sure your Apple wireless device is connected to your broadband modem or local network, verify your settings and try again. If you still can't connect, call your ISP."
There are two boxes with options. The first is "Connect Using" and "ethernet" is selected with "PPoE" being the other option. The second box says "Configure IPv4" and "Using DHCP" is selected, and "Manually" is the other option.
Obviously, I'm doing something wrong, but I don't have a clue. I'm getting online fine when I plug the ethernet cable into the back of the iMac. I've reset the modem by hitting the reset button. The light turns green on the TC but I can't connect to the internet. Any ideas? Feel free to call me a big dummy
Jim

Answer 1

Thank you, Jim Somoygi. I had a similar multi-hour odyssey with a AE and a Comcast cable modem.
This solved the seemingly endless blinking amber light:
1. unplug power from the modem and AE (or time capsule). Go get a beverage of your choice (wait a couple of minutes).
2. My modem has a battery backup (Comcast phone service). So, I pressed a tiny reset button on the back of the Comcast modem (it's made by Arris). With the battery backup, I'm not sure I would have been able to reset the modem simply by unplugging.
3. Make sure there is an ethernet cable connecting the cable modem and the AE or TC
4. Plug the modem back in, wait for the lights to come on. I also had to press a "standby" button on the front of the modem to get all the lights to come on.
5. Plug in the AE (or TC)
6. Green light on the AE (it's not easy being green)
7. Choose the appropriate Airport network & surf away.
I will say that the problem seems to be with the modem, rather than the AE. Once I reset the modem, I could configure the AE with ease. Once the AE is configured, it is absolutely rock stable. Before I fiddled with the network & brought this on myself, I enjoyed shockingly stable networking with the AE -- much better than with previous attempts with Netgear or Buffalo products (although I do like the ease with which Buffalo products can be configured together, using their proprietary handshaking protocol "AOSS").