CIsco Aironet 1010 & 1131AG Integration

My Current wifi infrastructure exsists as follows:
WLC: 4402 IOS: 3.2.195.13 (Not sure about the upgrade options)
LAP: AP1010 (LWAPP)
LWAPP Transport Mode: Layer 2

What I am trying to go to is as follows:
WLC: 4402 IOS: 3.2.195.13
LAP: AP1010 & AP1131AG (LWAPP)
LWAPP Transport Mode: Layer 3

We had 19 AP's (AP1010) one went bad so we went to replace with a stronger model the 1131AG we ended up ordering the autonomous model and i successfully upgraded to a Lightweight version

did alot of research a troubleshooting my main issue that i realize is the 1131AG can only contect via Layer 3 currently the Controller is Layer 2

So I configured IP addresses on the AP1010 currently and set the WLC to master mode after reboot but i can't pick them up at all in layer 3 mode i can ping them but it doesn't show they have an ip address in the details list of the access points when they connect on Layer 2 (ap ip status disenabled). Thats my issue with the current AP1010
so with the 1131AG I get the following error

%LWAPP-3-CLIENTERRORLOG: Discovery Timer: found the discovery response from master controller
%LWAPP-5-CHANGED: LWAPP changed state to JOIN
%LWAPP-3-CLIENTERRORLOG: Join Timer: did not recieve join response (controller - DHO-4402)
%LWAPP-3-CLIENTERRORLOG: Set Transport Address: no more AP manager IP addresses remain
%SYS-5-RELOAD: Reload requested by LWAPP CLIENT. Reload Reason: DID NOT GET JOIN RESPONSE.
%LWAPP-5-CHANGED: LWAPP changed state to DOWN

So in the end my issues are configuring the AP1010 & AP1131AG to work on Layer 3 and not effect my current wifi implementation of guest networks and our internal staff network

Do i need to upgrade my Controller if so to what IOS Version.