E1550 causing modem to lose internet

Honestly, I wouldn't believe it if I hadn't seen it more than once.
I have an E1550 less than 1 year old.  Lately, I have been losing internet on the AT&T modem.  I called AT&T but as part of their diagnostics, I have to plug the modem directly into the PC.  I have loaded the latest firmware to the E1550.
Situation:
Lose Internet but wireless connectivity to router exists
Internet light on modem is out (modem is connected to router)
Unplug modem and leave off - plug in, internet light is still out
Unplug router, plug router back in - no internet connection but do have wireless connectivity to router
Take cable from modem to router and plug directly into PC - internet light comes on in modem and I have internet from PC
Take cable from PC and plug back into router - I have internet via wireless
What I can't figure out is what could be happening in router that would impact modem internet connection.  I have replicated this at least 3 times. Yes, the modem is a bit old, but since plugging it directly into the PC works, I'm thinking it has to be the router and I cannot figure out why unless there's some sort of electrical thing going on in the router.  I have searched the internet and I don't see anyone else with this issue.  Do I have to buy a new router?  This one is < 1 year old.

The information that you have provided is for wired connection or for wireless connection? If the information that you provided is for wired connection then try to lower down the MTU size to 1400 from 1500. Then checck the connectivity status... 
Try to do the following steps:
A] With the help of Cisco Connect Software (if at all you have installed the router with the help of this software)
          1] Open the software and go to the option which says "Router Settings"
          2] Then click on the option which says "Advanced Settings" which will take you to the router's configuration page.
         3] Lower the MTU (Maximum Transmission Unit) from 1500 to 1400 or less (usually found on your router's main/ basic setup page)
B] If you haven't installed Cisco Connect then you can log on to the router's user interface using it's default IP address in the browser which is 192.168.1.1 and type in 'admin' as the password leaving the username field blank. This will take you to the router's web interface and then follow steps as mentioned above to make the changes.
Second, try to ping 192.168.1.1 and 
DNS1 - 4.2.2.2
DNS2 - 4.2.2.3
but make sure the computer should be wired with the router...

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