Close the lid very weak internet speed Open the lid great internet speed

I have my 13.3" MBP connected to a external display (23" ACD) using BT mouse/KB. With the lid cracked open I have GREAT internet speed, if I close the lid internet speed slows to a CRAW.
I have never had this problem before.
Here's what I tried:
Time Capsule (TC) reset (unplug)
TC changed several channels
TC Changed network to Mixed, and N (2.4GHz), N (5GHz)
TC checked Internet Robust
Reset Cable Modem (re-provisioned)
Checked with application iStumbler no problems with interference
BTW, I have 2 laptops and both do the same thing if connected to the 23" ACD in a room about 22 feet away from the TC. I also have a 24" ACD LED in another room that's about 5 feet away from the TC and do NOT have any of the problems described above with either MBP connected.
Internet Speedtest lid closed = 0.32 mbps download
Internet Speedtest lid open = 28.89 mbps download
http://www.speedtest.net/index.php?nojs=1
This is not just a flby. I've been testing and setting now for 2 hours with NO change.
Any ideas?
Thanks

Close the lid and prop the machine up on edge, so the display is in about the same position it would be in if it were open. Any difference?
None, no difference.
Applecare geniuses said it was the TC after 2 hrs of trouble shooting with him, he authorized a replacement. So Im on my way to the Apple store for a replacement, hopefully they will give me the 1,000GB one for the 500GB one I have. We'll see.

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