Came home yesterday to find my time capsule has an orange light blinking and my wifi network is no longer working. Not sure how/why this happened and can't get it working. Do i just reset it and will this lose my backups? Or can I create a new wifi n/w?

Its an  802.11n (4th Gen) model
I looked at the diagnostics screen (next to the blinking orange icon on the Airport Utility and it says there are four issues:
the software (currently V 7.6.1) has an update available. If I click update I get the error message "There was an error connecting to the update server. Check your network settings and try again". However, nothing's been changed settings-wise
The other 3 status issues are:
Internet Connection - but the router is working fine and I can connect to the router via wifi on my MacBook Pro
No DNS Servers - I have no idea what this means
Ethernet Unplugged - it's not and I also replaced the ethernet cable which has no effect
Do I just cut my losses and hit the reset button - if so will I need to back everything up again (i.e. I will no longer be able to access my backups) or do I just set up a new wifi network - again, will this impact on my backups?
Any help/advice would be appreciated - thanks

Do a factory reset .. nothing will be deleted from your backups and you will be able to get access to them again.
The Factory Reset Gen1-4.
Unplug your TC. Hold in reset. and power the TC back on.. without releasing reset for about 10sec. When the status light flashes rapidly; release it.
Be Gentle! Feel the switch click on. It has a positive feel..  add no more pressure after that.
TC will reboot after a couple of minutes with default factory settings and will wipe out previous configurations.
No files are deleted on the hard disk.. No reset of the TC deletes files.. to do that you use erase from the airport utility.

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