I had a similar issue and eventually got it to work. Here is my summary (click the link and read):
Let me know if that works for you. Oh, also, try to activate it like right next to the router, then after it sets up and installs the new firmware it should work for you.
If it doesn’t work for you, there are about 2 dozen steps support will walk you through, but read my post about the exact same issue and see if it works for you like it did for me.