Windows 7 will not work with ethernet or wireless shows connected but no interne

[JW5200]

Hello,
Up until last Friday, my father's computer worked fine. (using wireless) Then on Saturday, he called to say he could not get on the internet.
The first thing I tried was going through his ethernet port, I disabled wireless and enabled ethernet, it acquired an IP address (192.168.1.x) and gateway (192.168.1.1), etc. automatically and was able to identify the network. (router ID). The adapter reports no internet access.
I tried to ping the router, no reply.
I turned off the McAfee firewall.
I went back to the wireless to re-connect and it sees the network, and will only connect if I enter the right password. (which indicates to me it is communicating with the router to some degree)
Tried shutting everything down and restarting. I also tried resetting Verizon router to factory defaults. No luck.
So, my questions are:
1. Is there any other setting in Windows 7 I am missing?
2. Does the fact it sees the wireless network and will only accept the right password to connect indicate it is in fact connecting to the router?
3. Is it possible for malware to prevent pinging the router?
Any help would be greatly appreciated.
JW

 

[JW5200]

A couple of other notes.
His IPod connects to the wireless and internet without problems.
Verizon came out on Saturday and replaced his router and because the Ipod worked said it is something wrong with his PC.

 

[ted180]

did the Ipod connect to your router or someone close??

 

[JW5200]

It is connecting to the same network It lists the right name and required the security key.It does show two other wireless nets close, but they are secured. I was hoping there was an unsecured network close, just to see if the computer would connect to those.