Trying to hire - What am I doing wrong?

I work for a small online retailer in the Boston area. We have reached the point where we need to hire another customer service representative. We do exclusively what is sometimes refereed to as 'tier 2' service. Every representitive is eventually trained to handle all types of calls and given the authority to make decisions like expediting shipping etc. The idea being that the person who picks up the phone can fix your problem without getting permission from someone else, putting you on hold, etc. 

So far we have not been able to find someone to fill the position.

We have used a local agency, as well as a monster ad. 

We of course feel that this is a good job, and that it should not be this hard to find a good employee. We are offering $16/hr to start moving to $18 after a trial period of 60 days. Vacation, sick time, fully paid health and dental (again after 60 days), and a casual work environment (jeans and t-shirts are standard) . We are a growing company and the position is a permanent full time position. Fully training a new person might take 6-9 months so we are VERY serious about recruiting and retention of the right people. We have virtually no turnover outside of employees who develop problems that we are not able to resolve after extensive attempts at intervention.

We do not require anything beyond a high school diploma or equivalent, although because credit cards are involved we do require a criminal background check. 

Our primary requirements are: Ability to communicate articulately over the phone, Ability to handle difficult customers without internalizing the stress, Sound independent decision making within a general framework, Ability and willingness to learn about our product line, and basic computer skills.

To us this didn't sound like much. We are not restricting ourselves to people with a customer service background or fancy degrees, just the right personality and traits that can't be easily taught. We openly state we will spend extensive time training the candidate and require no prior knowledge of our industry.

So far most candidates (about 15:1) do not read the monster ad before submitting (what passes for) a resume, and those few who do are mostly terrible, giant red flags all over the place. 

Does anyone have any ideas as to what we might be doing wrong? Is the salary out of line for this region? Is there somewhere else I should be looking?

I imagine that within reasonable distance of our building there must be several people who would be great for this position and would like to have it... how can I better locate them?