DrStrangelove:
What does the logging on your DGN3500 say?
I can't seem to find anything overly useful in terms of logging. It logs security errors, but nothing that would help isolate this problem.
Had a look at the DSL line stats? Even Ethernet line stats.
Seeing any CRC errors? i.e. more than say 50 a day.
Here's the router stats:

What's the CPU/memory usage like?
Not sure how I'd query that information. I can't see anything obvious in the admin interface.
I'm just thinking out loud, as I like to know a bit about why something breaks before I go off and get something else.
Yeah, thats a valid approach. But sometimes its just easier to concede defeat and attempt to purchase a more robust product.
To be honest, I would have thought the number of devices you have would work OK with the current DGN3500.
I know Netgear halted the release of one of their newer routers to re-release it with more memory and I'm not sure what an olde worlde DGN3500 has inside it. But really how much memory could a LAN and a ARP table need, considering interfaces have their own buffering/windowing resources.
I did perform a firmware upgrade just the other side of Christmas. Its not impossible that this is the true cause of the increased instability since Annual Present Day, and that the increased number of wireless connections is just a red herring.