I have a theory on this one, as I have the same issue. I have had no problems with system link and BF2 until I signed up with Live. At that time, last week, I received the latest dashboard for the XBox and an update to BF2. I also downloaded the Kashyk Assault and the Expansion Pack for BF2. Now all of a sudden, System Link does not work. I emailed tech support at LucasArts to see if they can fix it.
Do you use two accounts for Live? If so, you may be able to log into XBox Live and then choose System Link. I've noticed in BF2 that once you log into Live, and select System Link, It shows your friends list. If you use 2 accounts, you may be able to add both accounts as friends and play that way, although it may go out to the internet and slow you down.
I don't think it is a problem with your router or Live would not work. Most networking works fine on the same side of the router.
Have you downloaded the Expansion Pack or the Kashyk Assault?