I may have this solved. Certainly I am up and running now.
After trying many times I actually got an error message which idendified an area to look at. Authenticating with the iTunes store apparently does mean that the content is being validated and for some reason it was hanging on that process. On two attempts in about 20 it failed complaining:
ERROR ITMS-3000: "Line 386 column 27: element "audience" missing required attribute "scheme" at XPath /package/book/metadata/audience_info/audience"
ERROR ITMS-3000: "Line 386 column 38: element "audience" incomplete; expected element "range" or "value" at XPath /package/book/metadata/audience_info/audience".
I deleted and re-entered all the data. It now works. I noted that you can click the "Add Criteria" and it creates a blank criteria that is invisible in the list. It has no defaults and you cannot see it. I may have had an empty criteria sitting there and that was what it was complaining about.
2 Bugs then.
1. It should not hang on "Authenticating with the iTunes Store…"
2. It should not be possible to create empty Audience criteria that are invisible in the list.
I hope this helps someone else. It made my life misserable for a few days.
cheers
Mark