Well the ap does need to have an IP address in order to join. You can set a static address but there isn't a command to say where the dhcp server is. What code is on the WLC. For that ap, the WLC can't be running anything newer than 7.0.x.
Post the output of the boot up process from the AP also.
I have converted many 1231G here at school district and deployed them to few schools. Once the APs are showing the Xmas light show then it's ready to discover the controller. Once the AP is connected to a controller, I see an AP0014.xxxx.xxxx displayed under WIRELESS tab. From there I uncheck the STATIC IP check box to make that AP to have DHCP address. I have been using the UpgradeTool to convert autonomous to LWAP.