Try upgrading the firmware to the latest version, 1.36, if it isn't already (you can see it on the main setup screen of the router in your browser). Check LinkSys's website to get the firmware and installer (one package).
If that doesn't help, then you've got a bad one. I think I may have to replace one that my roommate's parents have. It was working fine for months, then recently it started to just stop transferring data, even though it claimed to be working fine based on the status. Then eventually it starts working again. One of my co-workers said his was doing that until he upgraded the firmware.