10D doesn't recognize 550EX

I have a NEW 550EX to go with my 10D that I can not get to fire from the camera's hotshoe...

It fires via pilot button, so I know it is a working unit.

I think something is wrong with the 10D. I have read all the manual cover to cover and think I have discovered the problem. The problem is I don't know how to fix the problem...LOL (not really)

The instructions all say: "in the viewfinder, check that the z (flash icon) is lit". Well, it is not lit and they don't tell you what to do about it.

As previously stated, the unit is new and the camera is only 5 months old. I did clean the contacts. I also have the ST-E2 which does not fire the unit when on the camera.

I did a search on the forum but couldn't find a reference to this specific problem. Does anybody have any clues?

I have been using external flash via sync cords without problem, but could something have caused a circuit problem?

p.s. the z (flash icon) does appear for built-in flash

Thanks in advance for any help.
Rodrigo