This really should have been asked in the Simple Questions thread, but since I am here....
Your problem is that you are looking for it on the islands. Your Raikou will only roam around Kanto. Put a Lv40 Poke in front of your party, use Max Repel, and move around to different routes, going through the grass. Eventually it will pop up. When it does, "Master Ball, GOOOO!!!"