Thanks for the question, and great troubleshooting so far. I understand you are receiving error -42408. The next step will be to remove the SC Info folder:
While the article title may not speak specifically to your issue, this is the next applicable step as per http://support.apple.com/kb/TS3297
Mac OS X
1. Quit iTunes and any other open applications until only Finder is open.
2. Choose Go > Go to Folder.
3. Type /Users/Shared/SC Info and click Go.
4. If Finder is not already set to column view, set it by choosing View > as Columns.
5. Select the SC Info folder and move it to the Trash by choosing File > Move to Trash.
6. Restart the computer and open iTunes.
7. Authorize your computer to play your purchases. Note: If you have multiple accounts you will need to authorize your computer for each account. For more information on how to authorize your computer, see this article.