Although illegal, age discrimination appears to be alive and well, even in today's tight labor market. It is rather outrageous that an employer would complain about the lack of job candidates, while overlooking a vast pool of educated, experienced, and dedicated talent. Not only is it foolish to purposely ignore this golden resource, the real kicker is that it is illegal to do so.
It sounds like you have taken several of the right steps to find a job, since newspapers, agencies, and the Internet are clearly valuable resources to tap. You should also consider not only your present network of friends, associates, and former associates, but also consider expanding your network by joining some new groups as well, including some that have the specific objective of finding employment for the members.
It is also important to view your job search as a job in and of itself. If you are used to working 40-50 hours per week, then that is the kind of time that you should be putting into your job search.
The irony behind age discrimination is that any company that would engage in it is woefully out of date.
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