2-Color Image

OK, first let me start of my saying I am a Web Designer who is starting
to dabble in print design. I have done 4-color small brochures before.
I am now doing a 2-color(big pain!!). My printer is telling me this
image is still 4 color. Here is the link to it (it is
zipped):www.jodynelson.com/CONCLUSION.zip
Here are the steps that I used to make Duotone:
1. Convert image to Greyscale
2. Convert to Duotone (PANTONE 654 C)
3. Save as EPS
What did I do wrong?
Any help would be greatly appreciated.

Nitestarz


Content - 2-Color Image
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