Trouble with Airport Express as repeater

Question

Hi Community.
I want to extend the WiFi-range of my new (4th-gen.) Time Capsule to the other end of the house by use of my old AirPort Express (probably 1st gen. - only 802.11b/g-mode).
I read some of the threads here in the community and thought that I had understood how to to do that but now my Time capsule keeps switching between steady green and yellow flashing lights. On AirPort utility 6.0 I see that apparently my internet connection is supposed to be lost whenever it goes to the yellow light. I had no such troble before I changed the configuration to "Participate in a WDS". Before it was on "create a wireless network".
To summarize what I did:
Using AirPort Utility 5.6 I first switched the Time Capsule (which is connected to the modem and to my iMac via ethernet) to the "Participate in a WDS network" and clicked "Allow this network to be extended". Unter the "WDS-Menu" I set it to "WDS main" and clicked "Allow wireless clients". Afterwards I entered the MAC-Adress of my AirPort Express under the WDS Remotes. Then I updated the Time Capsule. (it is still set up to also transmit signals in the 5 GHZ / n-mode under a different automatic channel, but this should not affect the AirPort Express, since it does not receive any signals in 802.11n - does it?)
Afterwards I connected my AirPort Express via ethernet to the Time Capsule and also set it to "Participate in a WDS network". The Radio Mode is on "802.11b/g compatibel" and it is on the same channel as my Time Capsule. Under the WDS-Menu I set it up as a WDS-remote, allowed wireless clients and entered the MAC-Adress of my Time Capsule as the WDS-Main.
Now I try to run the setup and every 10 seconds or so the yellow light of the Time Capsule lights up.
Does anybody have an idea what might be wrong?
Thanks!

Answer 1

Except for enabling the "Allow this network to be extended" option which is only valid for 802.11n networks, it sounds like you did everything correctly, but please take a look at the following step-by-step procedure to see you if may have missed something along the way.
Static WDS Setup with "Mixed" (802.11g & 802.11n) AirPort Base Stations
Note: To facilitate the WDS set up:
Perform a "factory default" reset on all of the base stations that you plan on using in the WDS. This will get them back to their respective "out-of-the-box" configurations.
To avoid having to "switch" wireless networks within the AirPort Utility, temporarily connect the remote base station(s) to the Time Capsule (TC) by Ethernet during the set up phase, and then, relocate it to the desired location when complete.
Be sure to jot down the AirPort IDs (MAC addresses) for each of the base stations to be used in the WDS. The AirPort ID is printed on the label on the bottom/side of the base station.
Main Base Station Setup
Click the AirPort status menu in the menu bar and choose the wireless network created by the TC.
Open AirPort Utility.
Select the TC, and then, choose Manual Setup from the Base Station menu.
Enter the base station password if necessary. If the base station is using the default password of public, you will not be prompted for a password.
Click Wireless in the toolbar, and then, choose “Participate in a WDS network” from the Wireless Mode pop-up menu. Note: You will need to hold down the Option key in order to get this option on the AEBSn, 802.11n AirPort Express Base Station (AXn), or Time Capsule (TC).
Click WDS and then, choose “WDS main” from the WDS Mode pop-up menu.
Select the “Allow wireless clients” checkbox if you want client computer to connect to this base station.
Click the Add "+" button and enter the AirPort ID of 802.11b/g AirPort Express Base Station (AX).
Click Update to send the new settings to the base station in the WDS.
Remote Base Station Setup
Open AirPort Utility; select the AX, and then, choose Manual Setup from the Base Station menu.
Enter the base station password, if necessary.
Enter the same network password as the TC, if necessary.
Click AirPort in the toolbar, and then, click Wireless. Choose “Participate in a WDS network” from the Wireless Mode pop-up menu, and then, choose the same channel as the TC from the Channel pop-up menu.
Click WDS and choose “WDS remote” from the pop-up menu.
Enter the AirPort ID of the TC in the WDS Main field.
Click Update to transfer the settings to the base station.
(ref: Pages 42-46 of "Designing AirPort Networks.)
(ref: Setting up and configuring a Wireless Distribution System (802.11b/g)