I kept the firmware at 9.8.1. I did try AES only, but did not try WPA2 only.
What did work was this:
Working with Ruckus tech support, I created a new wireless SSID with the same configuration - and that worked!
However, the windows 8 laptops and old iphone 4 devices still could not connect to the first SSID i created. The only way they could connect to that SSID was if i disabled the security.
I can only think of two possible explanations:
1) it has to do with the fact that the SSID name was one that I had used before, and that these devices had some "memory" of the old network... (despite us trying to "forget" the network from before on these client devices)
2) Initially, I had set up the wireless SSID on the ruckus with the default firmware. I subsequently updated the firmware - perhaps that upgrade broke something with that initial SSID configuration?
Right now, things seem to be working with the network under a new SSID name and my users are happy, so i'm reluctant to pursue the issue any further, even though i'm still very curious as to why it happened.
thanks.