Check your modem using Control Panel. Click on Control Panel, double click on Phone and Modem Options, click on the Modems tab, click on your modem, then click on Properties. If it shows its not working, try uninstalling then reinstalling it.
I don't know enough about Spyware Blaster to tell you how to jump on this one. I have Ad-Aware myself and find it sufficient for my needs.
When I followed your suggestion, it said "this device is working properly". Last night I tried the troubleshooter option, but when I clicked on that one of the first things it wanted to do was connect to the internet using an 800 number, but no dial tone. Didn't see any other "help" options through troubleshooter.