Using WPA results in "self-assigned IP" / DHCP not working / Comm prob?

Hi,
New to the forum...just replaced all wintel boxes with new macs (macbook pro and mac mini; both at 10.4.6) talking to a new AEBS (updated firmware) which is connected to a Comcast cable modem.
Configuring the AEBS without security results in a very happy network...good range and DHCP behaves properly...handing IP addresses to both clients promptly and the throughput as reflected by www.speakeasy.net/speedtest is great.
Adding wireless security to the mix, be it WPA+WPA2; WPA2; WPA; WEP, creates problems. If I configure the AEBS with WPA+WPA2, for instance, put in a password, update the router, reboot the cable modem and the router, delete any existing preferred networks, add a new preferred network with WPA2 and the correct password (btw, I have cleared my keychain to avoid any password caching problems) and apply the changes the following behavior occurs like clockwork: The client connects to the AEBS, as reflected in the status in the network preferences window and the internet connect window, but it never gets an IP address from the AEBS and is stuck in the "self-assigned IP" / 169.x.x.x abyss. I wait much longer than 40 seconds and nothing ever changes. In addition, attempting to configure the AEBS while in this state (from airport admin utility) results in a very long attempt to read the configuration which never works - I need to connect with ethernet to reconfigure. If I go back and remove the security policy on both sides the network works just fine...including the ability to configure the AEBS over wireless.
For the record, the AEBS settings are: Open network; channel 11; b only; no interference robustness set; uses DHCP for IP from cable modem; distributes IP addresses - shares single IP address using DHCP + NAT using 192.168.1.1 addressing. All of that seems appropriate and correct but, hey, it ain't working and I am out of ideas.
All help is welcome! Thanks.
macbook pro   Mac OS X (10.4.6)   mac mini
macbook pro   Mac OS X (10.4.6)   mac mini
macbook pro   Mac OS X (10.4.6)   mac mini
macbook pro   Mac OS X (10.4.6)   mac mini

Hey Rich,
I eventually got mine to work but I really cannot give you a clear view of how...it was hit or miss. If you are running into the same thing, I might be able to guide you to the same resolution.
When you turn on WEP or WPA, does the network connect but not get an IP address from DHCP (self-assigned address abyss) or does it not connect at all? Asked another way, what does the system preferences / show / network status page say for the wireless network in question?
-matt
macbook pro Mac OS X (10.4.6) mac mini

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    changed. And more about the system; also, if you've set the computer
    to automatic and visited a place such as a public library's free internet.
    Good luck & happy computing!

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