small update... 10mins after doing the above contacts and apps started appearing in search... So yeah some while more before your music appears too...

edit: 30mins and some music starts appearing in the contact's ringtone so maybe another 30mins and all should be done...

Edit2: Actually the music was indexed quite somewhile back...If you cant see all your music when choosing just search for it by typing and your desired track will come up...I think there is a limit on how many music items can be displayed at once for you to choose the contact's ringtone...