My brand new iPhone 5 keeps saying "Connection Unsuccessful: Make sure "___" is turned on and in range" when I try to connect to my BlueTooth Stereo.

I just bought a brand new iPhone 5 (White and Gold) and have been having trouble keeping it connected to my BlueTooth Stereo.  The stereo was purchased brand new back in September and is current on all software.  Before I had my iPhone 5, I had the iPhone 4 and had no troubles with it connecting or remembering to connect to the stereo when it was in range.  Now, in order to connect to it, I have to first "forget the device" then search for it again, find it, and connect.  As soon as I turn either the stereo off, turn the iPhone off, or switch modes on the stereo (to CD mode, radio, etc) it loses the connection and does not pick it up again.  It still shows up in my list of available bluetooth devices, but when I try to connect it says "Connection Unsuccessful: Make sure '____' is turned on and in range" which of course, it is.
I bought this stereo because I am a music teacher and use my phone frequently when teaching my classes.  You can probably imagine how cumbersome it becomes when after each class if I have alternated between using my iPhone to play music or switching to CD mode, I then need to "forget the device" and follow the steps I outlined above to get it working again.
Has anyone else had this problem with the new iPhone and does anyone have a solution (I HOPE!!!!!)
Thanks!
-Disgruntled Music Teacher

I've not seen this type of behavior, but see if this support document helps. http://support.apple.com/kb/HT1664

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