It looks like you've done a bit of research on this, but you are correct that the Linksys can't be used as a repeater with the current firmware. It can, however, become ythe WAP for your network but that will require running a network cable between the routers. I don't know how your network config, but I suspect this isn't what you were looking for.
Outside buying a repeater, dd-wrt is probably your only bet on getting a repeater set up by possibly using your old router. I've never used dd-wrt and am not a unix expert so can't really help you out with configuring it. I bet the interweb has a bunch of info on how to set up dd-wrt on that router, however; those Linksys routers are everywhere !