Iterations not showing up when trying to create Test Schedules

We were recently updated to version 4.0.1. Before we used the Test Milestones in the Test Schedule when creating Test Execution Records. Now when I try to create Test Schedules it seems I need to selected a Parent Iteration first. When I click on Browse to find a parent iteration I see all the old milestones from previous releases were auto-migrated during the upgrade to 4.0.1. So I went to Manage this project area to create new releases and iterations under Timelines. I am able to create Timelines and Iterations with no problems but when I go back to Test Schedules in my Test Plan they don't show up. I was sure to select the checkbox for "A release is scheduled for this iteration". I still only see the old ones that were auto-migrated during the upgrade. I have followed all the training and online help and tutorials and I don't see what I am doing differently. Any help on this would be greatly appreciated.