WRT160Nv3 drops WiFi and Hardwired connections simultaneously

Question

I've been using the WRT160N for about 4-5 months now. I'm running the most up-to-date firmware available for the router. I haven't had any real issues with it's performance until recently. The router handles PPPoE and usually only has two computers connected at a time, at most five. I use it for browsing, streaming, and gaming.
About a week ago I found that my router had completely reset itself while I was at work. No one had been at the house, so I know that it wasn't tampered with. Everything was set to factory, and it was broadcasting it's SSID as Linksys, which I find odd because I thought the factory default didn't automatically have SSID checked, I could be wrong.
 So, I set it up to the way it was before the incident, roughly, and it now works for every machine again (running XP, OS 10.7, Vista, Windows 7), but while I'm gaming the router will halt after about 4 minutes, all of the lights that are used to indicate traffic over ethernet light up, solid, stay lit for about 5 seconds, and then start flickering again.
 The odd thing is, that I don't lose connection with my ISP when this happens. I'm still connected, I know this because my IP is the same after this happens as it was it was before.
 Also, this happens with WiFi connections and wired connections, it doesn't matter. The only thing I can think of is it overheating, because it gets warm.
Here are my current settings:
Basic>
PPPoE
Wireless>
Manual 
B-G Mixed
20Mhz Only (bg)
Channel 11
SSID enabled
Wireless>Security
WPA Personal
Wireless>Advanced
Beacon Interval : 75 (if set to default my XP machines won't find the network)
Fragmentation Threshold: 2304
RTS Threshold: 2304
Security>
Filter Anonymous Requests: Disabled
Admin>Log>
Enabled as of yesterday
It says the Firmware is "3.0.02 Build 003" and I think last I looked it was at build 8, if that's the case, I'll update it after posting this.
Thanks. 

Answer 1

I have reinstalled the current firmware, same problem, though I have made some more observations...
When my router resets itself, or when the lights come on solid, it will drop the connection for the wired computer, not just the internet, the local network. Windows acts like there's nothing connected to the computer. The computer using WiFi will show a signal drop, and I cannot connect to the router in that time, but it doesn't drop the WiFi connection completely, all of the time. That may be more related to the computer harware, the OS, or connection type than the actual router itself.
The router is cunnetly suspended in front of a pretty big fan, and still it drops a connection any time you want to do anything that requires constant bandwidth. I'm going to continue messing with it, but it's starting to seem like a lost cause. 
Thanks again.