This only took me about three and a half hours to finally sort out yesterday. Hopefully you find this post before wasting as much time as I did. If you use a 4.x version of TinyMCE instead of a 3.x version, you are going to have some difficulties. Although an easy fix, it is not very obvious what the problem is initially.
On page 25, James instructs us to copy and modify change_form.html. He instructs us to add some code to the header looking like this.
The problem is in line four above; the theme reference has changed from version three to four of TinyMCE. It needs to be changed from simple to modern. Additionally, to simplify the appearance and include most of the same functionality, I added a couple of other initialization parameters so it looks like the following.
You likely could care less about the long way I discovered this. However, the reference for these initialization parameters can be found in the TinyMCE documentation discussing configuration.