Maybe you've already gotten your answer, but I was having the same problem. I kept re-running the setup wizard at the machine itself and it would just hang when trying to establish a connection. What I did was reset the machine to the factory settings (via the menu on the machine itself) and then re-ran the setup wizard. It worked. SO I'm guessing that because I had changed the router from WEP to WPA and had attempted to connect to the router with WEP it maintained that entry in memory and wouldn't let me overwrite it with a WPA entry.
Hope this helps.