how old is the yeast you are using? if it's fairly old the yeast culture may have died off. Also, when activiting the yeast you should use warm but not hot water. Hot water can kill the yeast, cold water may not activate it.
Your recipe seems reasonable. Does the solution in your reaction chamber bubble? If so then it's producing c02 and is working properly. If that's true then the issue lies along your plumbing system (either a leak in the tubing or a connection). Recheck all your silicone spots.
Also, I tried using a cheap airstone but it really doesn't work. If you search the SNS and potentially ebay you can pick up a glass/ceramic diffuser for under $7 including shipping.
I place my diffuser underneath the output of my HOB filter. That distributes the c02 gas rather nicely throughout the tank. You can also put it under the intake and have the impeller chop up the bubbles more and help with diffusion but it lowers the lifetime of your filter (so probably not the best option).