You have a PS2 at your office??!! I'm happy when I can get free coffee at mine! lol
I don't know much about Live but I'm pretty good at networking. It sounds like the settings are OK but it is not finding whatever file it has to use to start Live. I would guess that it's still on your drive but you aren't finding it somehow.
I don't see how this could have anything to do with being banned since you would have to connect to the server for it to tell you and it sounds like you're not getting that far.

Do me a favor and go into your xbox settings and tell me what it says next to Static IP, IP, Subnet mask, default gateway. you can get to your setting by going into system utils then settings. Here is what it should be:

Static Ip: No
Ip: 192.168.XX.X
Subnet mask: 255.255.255.0
DefaultGateway:192.168.XX.X

Maybe this will help. Try it and then get back to me.