IMac connected to Time Capsule but doesn't know it

The strangest thing is happening right now. About an hour, I suddenly lost internet connectivity. One minute, things were fine, so I took a break. About 30 minutes later, I cam back and no internet. I tried leaving then rejoining the network. It worked, but didn't. The iMac logged on, showed it was connected, but wouldn't surf the web. So I checked on Macbook, just to see if my DSL was down. Nope, working fine on the Macbook. Went back to the iMac and saw a "!" in the wifi indicator. Upon closer inspection, I realized the iMac couldn't even see my Time Capsule (Airport Utility found no devices), but was still somehow logging in and getting a DHCP address. Then it would promptly lose it. I've tried restarting the Time Capsule, the DSL modem AND the iMac. None have fixed it. What's stranger, Airport Utility on my Macbook shows the iMac as connected (the MAC address is listed).
Does anyone have any idea what's going on? I've never seen this before. The iMac is connected but doesn't know it. I have made no changes that would cause this. It was all of the sudden.
Thanks in advance (and yes, I give stars).
PS It is worth noting that I have 2 iPhones, an iPod Touch, a Macbook and a PC laptop as well. All "see" and connect to the wifi network, browsing the internet just fine. The iMac refuses to acknowledge the connection, despite the fact that it is active.
Message was edited by: Xian Rinpoche

Since you previously tried just restarting the iMac, what you did differently this time that worked was:
Shutting down (powering off), then restarting.
Resetting PRAM. Not sure if you did this because it is not the same as unplugging the iMac.
Resetting SMC (power management). This IS basically unplugging and reconnecting power cord.
The hardware involved in wireless networking may have needed to be reset. One of the above probably reset it. These are the formal procedures for resetting PRAM and SMC.
http://support.apple.com/kb/HT1379
http://support.apple.com/kb/HT1543

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