Ok, so I've tried everything that you guys mentioned.

Still not working.

Weird thing is that when I create an ad-hoc network on my MacBook (with internet sharing and encryption disabled) and attempt to connect to it on the phone, the phone will first indicate that it cannot connect to the network but then it will place a checkmark beside the network name. After placing the checkmark beside the network name, I notice two things:

1) a private (169.xx.xx.xx) address shows up in the network details

2) if I turn on internet sharing on the MacBook, the phone refuses to even put a checkmark beside the network name....once I turn off internet sharing, the phone will do that weird checkmark behavior again

Now, I do have another iPhone that can connect to this ad-hoc network without any problems and even get on wifi without hassle.

Boy, I'm so lost on this problematic one!!!