Time Machine Crashing

I have an Airport Extreme with an attached external Western Digital Hard drive. I'm on a 2007 Santa Rosa Macbook Pro. Prior to upgrading to Lion, Time Machine was working over the wireless network flawlessly. After upgrading to Lion I keep getting an error. Since then I reformatted my computer (installed Mountain Lion from scratch), formatted the time machine hard drive, and I'm still getting this error. Of note: There are two other Lion (not Mountain Lion) machines that ALSO use this drive for time machine backups, and they're working flawlessly.

So, whenever I select the hard drive over the network and try to start Time Machine, it acts like it's going to work, and it says "Preparing backup …"

That goes on for a minute or so. Then it crashes! First I get an error window that says this:

"The disk you inserted was not readable by this computer."

With three choices: "Initialize…" "Eject" "Ignore"

Then I get a second error window that says this:

The backup disk image “/Volumes/Time Machine-1/*****’s MacBook Pro.sparsebundle” could not be created (error 60).

I used TIme Machine Buddy and here's what it spits out:

Starting manual backup

Attempting to mount network destination URL: afp://*****%20*****;AUTH=SRP@***%20******._afpovertcp._tcp.local/Time%20Machine

Mounted network destination at mount point: /Volumes/Time Machine using URL: afp://*****%20*****;AUTH=SRP@***%20******._afpovertcp._tcp.local/Time%20Machine

Creating disk image /Volumes/Time Machine/******* MacBook Pro.sparsebundle

Error 60 creating backup disk image

Failed to create disk image /Volumes/Time Machine/******* MacBook Pro.sparsebundle, status: 60

Backup failed with error: 20

Failed to eject volume /Volumes/Time Machine (FSVolumeRefNum: -111; status: -47; dissenting pid: 0)

I've replaced the name of my macbook and the airport extreme with asterisks.

I've tried changing the name of the disk, the name of the airport extreme, and the name of the wireless network. I've changed the authentication in Airport Utility to each of the three different settings (device password, disk password, accounts).

It's clearly a problem with Mountain Lion, but how can I fix it?!