make oldconfig worked fine for me, are you in the right directory ?
Personally I got the latest kernel from
www.kernel.org untared that to /usr/src , then coppied the old config file (the one you are playing with) to the new source dir, then go to the the new source tree (/usr/src/linux-2.6.10......) then do
make oldconfig
make xconfig
make all
make modules_install
make install