Restoring it to factory settings would probably work.
But you don't need to nuke it..
You can try this (assuming you still can't see your Time Capsule) -
Open the Airport Utility
Under the File menu (left hand corner of your screen next to the Apple Menu) chose "Configure other..."
Enter the IP address and password to the Time Capsule when prompted.
Click the Base Station Tab
Make sure there are no entries in the "Back to my Mac Box."
When I try to use the Configure other... option, I get an error message saying "An error occurred while reading the configuration..". Any ideas what is causing this?