Well Things are all working as should. Not exactly sure why. Here is what I did. I took modem upstairs and connected it to a phone jack. I left the TV DVD and dish all on downstairs. The modem powered up and the internet light came on and stayed on. So then I took the modem back downstairs and plugged it in the phone jack again. I left the Ethernet wire disconnected (which connects our Time Capsule for our MAC- which we use for a wifi connection). I also have a new wireless adapter on the modem. I had left the TV DVD and dish all on, and the internet light stayed on. At this point I still had the phone line and filter disconnected from the dish. All worked for about 4 hours then the internet went out again. I then reconnected the ethernet from the Time capsule. It was sporadic working for next 1-2 days. The SEars rep had me turn the wifi off on the DVD.
Then I got a RF-1 phone filter and reconnected the phone line to the dish, in the phone jack- verified this. I then connected the TV to our network from the Time capsule wifi. I was able to connect the TV to the internet and download updates for TV. A day later, I decided to try to reconnect the DVD, so I connected the DVD to the network from the modem wifi. It again connected to the internet and i was able to download firmware updates. So far it has continued to all work. Occasionally I see the internet light go off, then a short while later it will go red and then green and it may stay on right away, or it will repeat the light changes and then stay on. So I am still unsure as to why it's working, but I'm happy it is.
Previously I had verified I had phone lines in phone jacks and not ethernet ports, and all was correct.
Thanks.