Yes, I'm thinking that its the router as well. If both computers can speak to each other when connected directly then it seems reasonable to infer from this that it is the router that is the problem. However, this doesn't check that the wireless component of the equation is the problem since if you don't have wireless on the G5 (and, hey, why should you?) then you can't perform the same exercise using an ad-hoc wireless network directly between the two computers. Still, even without this information you've got to figure that the router may well be the source of the issue.
No, I don't work in tech support but troubleshooting issues (computer related or otherwise) does seem to be a big part of my work these days.
With regards to a replacement router, have you considered the new Airport Extreme? I've placed my order for one in an effort to overhaul my home wireless network, get the full benefit from my Core 2 Duo MacBook Pro and to get access to some Network Attached Storage (ordered an Iomega MiniMaxi 320GB hard drive and USB hub while they're reduced on the online Apple Store).
Well, stranger & stranger. Out of desperation I tried a 3rd-party hack for the router
described here. This all worked fine & I now have control over more parameters, including signal strength, a larger MAC list, etc (none of which I particularly need!).
Anyway, I reset the settings for my LAN in the router & tried sharing - no luck. The I restarted the G5 and, lo, everything working. I'm not sure whether this will be another temporary fix - i haven't dared shut down either comp. since!
I'd looked at the Airport Extreme & have mixed feelings. It doesn't really do anything I particularly need, and in the UK the transfer rate will be capped at 2.5 times faster (because of Gov. regs, apparently). Also, I wouldn't need the USB disk-sharing facility as I'm doing that already - my G5 has 1 terabyte of storage attached!
If I can keep struggling along for the time being, I think I'll try and wait till the Airport Express (with iTunes sharing) is updated to the 'n' protocol. iTunes over the airport is something I would like! I realise my wireless speed would be capped at 'g' speeds because of the Linksys, but I may be able to replace the Linksys at that stage.
EDIT: The connection has just dropped again. Neither comp. had been shut down or put to sleep - both were running normally & suddenly the communication stopped - go figure!
Also, a new bit of weirdness. In the finder window Network list, apart from the usual Library and Server aliases, every minute two new folders flash up for about a second - they are labeled My Network and Workgroup. This happens regularly every minute. I haven't seen these before. The normal appearence if my other comp is being seen is the network globe icon (with alias arrow) and the name of the comp. I've tried clicking on a folder as it flashes up but nothing happens.