I had the same problem and Ed from Ambient support was able to fix it for me. It looks like there is a firmware issue (I am on 4.0.0) and you may have to disable Weathercloud in the AmbientTool if you want WU to work.
First off, make sure that you are using the proper WU station ID and password in the AmbientTool. Next remove the Weathercloud ID and password on the Weathercloud screen in the AmbientTool. Hit the Save button. I actually had to do that twice, because it somehow automatically refilled that information.
And that was it for me. WU is now working without a problem. Weathercloud of course isn't working anymore. I would assume they will address this in the next firmware.
Hope it helps.