Things are changing - first it was secure ripping only that caused the problem, now it's usually secure ripping and occasionally large buffer ripping.
Have you checked for spyware? Ad-aware is a good program, and it's sounding to me like someone else is interfering. I run MJ on XP both at work and at home, and a multitude of others do as well, so for the moment you're an isolated case.
I've had many (more than I'd like) experiences with red-herrings, symptoms that were so clear you immediately knew what was going on, but when they were finally resolved, had nothing to do with what you thought. This really sounds to me like one.
Some points: Secure ripping and buffering ripping are not that much different. They use different amounts of CPU, and different amounts of memory, but that's it. With XP, the MJ process cannot trash memory anywhere else (not true with older windows). A driver can trash memory, but this is rare. So, MJ cannot trash the DSL driver/device. It's possible that the CD driver has a bug that may cause this, but very doubtful.
The network connection can break in many places, and without a lot of knowledge I don't have, it's impossible to break it down here. Your ISP says "it is down", but I don't know if your intel responds to pings by itself or not (or if a firewall filters ICMP or between you and them). Ask them how they checked to see if you are up. (It's REALLY hard to believe that ripping can kill a USB device, because it's no longer just trashing memory, it's sending a killer USB command down the wire).
CPU usage is a good spot to look. pings timing out because the CPU is too busy to echo could be a cause. To test this, start ripping, load a web page, and wait until it is done ripping plus 15 minutes or so, and see if the web page loads. Or try with a ping test, and see if after ripping is done, the pings start returning.
Check running processes and see what else is going on. Pare it down to the minimum.
Please let me know what you find out - this is a cool problem (I know it's a pain for you, but from the lofty distance of "it's not happening to me" I really want to know).
Thanks,
j