For wireless N to function(the speed benefit) it must use
WPA2 with AES, or else you will be limited to wireless G speeds, the "N" band may look available to the blu-ray player but it's speed isn't. There is only one other way you will get wireless N "speed" and it is to turn encryption off completely. Did you try the mixed WPA and WPA2 with TKIP and AES setting in the DIR-825? It might allow the blu-ray to connect with WPA2/AES allowing wireless N speed, as well allow the Mac to connect using WPA/TKIP which is working.
Progress! keep trying, does the passcode used have a lot of abnormal characters? Try some simple passcodes(short 8 character phrase letters only) and if it works upgrade the randomness/strength incrementally (20 characters recommended at least for security). Some wireless clients can't handle randomized ACSII characters.
Does Airport Utility offer the choice of WPA-PSK(WPA-Personal)>>WPA2>>AES? It might be confusing seeing just WPA>>WPA2>>AES, which is for enterprise RADIUS only(do not use).
It came up asking for the password because none of my trusted networks were available.
How come this happened for WPA/TKIP and not the other, did you have a pre-configured profile tied to the network SSID? Are you just waiting for the Mac to ask you to enter a passcode? You should really try to manually create the profile instead. Some have had to repair permissions to resolve WPA2 problems in OS X.