So after wiping the drive and reinstalling, everything seems to be hunky dory. What a PITA!

I'm migrating stuff from the old computer now--leaving out network settings. I hope that doesn't screw things up.

Back at square one. I'm going to wipe and reinstall one more time. If that doesn't fix the problem, I'm going to see about replacing the machine.

Did you migrate stuff again?

Just wondering how you are installing again? Do new MBA's come with the OS on a flash drive?

Should have went with a refurb like mine. Runs perfectly. Course I didn't migrate anything...

So it seems that the migration breaks it even though you did not transfer any settings?

Right, Jim. I can't imagine what's getting moved over that breaks it. On the other hand, even before I migrated stuff over, opening the App Store app gave me a no internet statement. Putzing around with the menu bar choices then led to a connection. But then after migrating even that didn't work.

Ever since Lion, I think it is, the OS sets up a recovery partition on the HD, John. You can get access to it by starting up while you hold down command-R. From there you can wipe and reinstall, either from the recovery partition or from the mothership. I'm doing a mothership reinstall this time in case there's something wrong with the recovery partition. (Is that possible, Jim?)

That isn't very encouraging, is it? Like before, you were able to access the internet at that point, just not SU?Not sure what you mean by the mothership. When you boot from the recovery partition it downloads a new installer, but you can't wipe the recovery partition as you are booted from it.

You can make a bootable USB stick that has the installer on it that will then let you repartition the HD so you can wipe the recovery partition. When installing the OS it will make a new partition.

Do you have a copy of the Mountain Lion installer laying around?

Not sure why the recovery partition would affect anything, but at this point I would want to wipe the whole drive too as one last ditch effort.

You can download this and make a simple USB boot stick that doesn't have the installer. You can wipe all partitions. Don't just do an Erase, do Partition and under Current scheme choose 1 Partition. When you reinstall it will download a new installer and make a new recovery partition on the internal drive.

There are many Googly hits with the steps to making a bootable OS X drive, but you can also use this easy app http://liondiskmaker.com to make a USB boot device with the installer on it, as long as you have the installer already downloaded.

I have the original version of Mt. Lion downloader, which I saved from way back when. I tried to use that to reinstall, but the computer wouldn't let me use it--not compatible with the machine, it said. That's weird, since the computer came with Mt. Lion installed. It is 10.8.5, however, rather than the original 10.8.

At this point, I'd be real suspicious of that particular machine. Send it back and let Apple send you a new machine with a current OS installed.