OK, I found a (wacky) solution:
Select iTunes > Preferences > General.
In the Import Settings window, go to the the Setting dropdown. (Note which setting is currently selected so you can go back at the end of this process and restore it to your original choice if you prefer.)
Select High Quality (128 kbps) from the menu, and then select OK.
Make sure you also have AAC selected as the import format, if it isn't already.
I had iTunes Plus selected, and once I changed it the ringtones worked. A couple things that I ran in to:
1.) I have to trim the file THEN convert to .AAC. I tried converting first and I got no joy.
2.) I tried to create two different tones from the same file and I couldn't. I had to create one, delete the files, import the .mp3 again and start over.
Anyway, hopes this helps someone...right as Apple has removed iTunes!