I hate to answer my own question, but here goes.
Seems like the only time you will be able to select an IAP item in the "View Details"
page of your app's new version is when the App Status is in "Ready to Upload Binary" or "Binary Rejected".
So what I did was reject my binary and deleted the IAP item and then add the IAP item again in Manage In App Purchases. Need to give it a new ID though, but no biggie for me.
After that, you should be able to select the IAP item in View Details page.
And THEN, press "Ready to Upload Binary"...
Hope this helps someone.
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