I fixed it!
I'm writing this "talk to myself" thread in the hopes that it can save another Xer the trouble I went through. To recap, mine was a 2000 V8 with the PATS (transponder chip in key) system.
After much trouble shooting I narrowed down the problem to the 791 bypass module that has a coded key inserted into it and a ribbon cable that wraps around the ignition key cylinder. In speaking with tech support again today, it turns out that the chip is located in the top of the key (where you would put it around your keychain) rather than the lower half (near the metal part) as the last tech had told me. I re-wrapped the ribbon cable around the ignition and then reset the key so the cable that surrounds it was over the transponder location.
So far I've started it up about 15 times and it has started every time (sometimes on the 2nd attempt due to my using the "tackless" operation). The range on it is very good so far - I went to the end of my street and was far enough away that I could not hear the engine start but saw the indicator lights! The model of Bulldog I have (112) has some nice features:
1) Keyless entry (even with the engine running)
2) Valet mode (which allows you to take the key out and leave the engine running)
3) Programmable run time.
4) Cold start.
It's also got some other features that I have not yet played around with. All and all it took me the better part of 2 days to get it running, but now that it is I'm loving this thing. The total cost was about $130 with the accessories that I needed. I can now use the one Bulldog remote but I will lose a few features:
1) No one press to unlock driver door, 2 press to unlock all doors - the bulldog locks or unlocks all doors at once.
2) No puddle lights when unlocking the via the bulldog - just parking lights. I can probably add this feature via some relays and another week of my time but I'm just going to leave it alone.
3) No panic button - although I'm not the panicy type
I ran the wire for the hood pin but have to get the connector to it. I'll make sure to do that before the next service so no one looses a hand
or worse yet starts my car with no oil in it! I guess the only thing left is to price out a new starter - I've started this thing about 50 times this weekend