Well so much for that idea. I had a similar problem when I upgraded to 1.04 and applied my backup configuration file.
I had to tell the router to use the factory defaults, then everything worked as expected.
You might want to give that a try first and as long as you make a config backup you can always get back to ground zero.
PS - I read your post again and it sounds exactly like mine acted when I used 1.04 it would show connected but would not browse, the Factory Defaults fixed every thing. I then made a few tweaks to the router and everything held in their. The trouble with the DIR 655 is there are so many options I don't have a clue what most of them do