Was able to get the XBox Live back connected. Over at the AT&T Community Forums someone posted about 30 minutes ago they did the power re-boot even though over at the Xbox Live Status site still had the warning up and not yet fixed. They said it came back as MTU 1500 and signed in just fine. I tried it about 15 minutes ago and yes...was able to sign into LIVE as well.
On the modem/gateway before the ethernet light would blink a few times...stay solid for about 2 seconds and blink again for about 3-4 seconds. Now it's a steady blinking.