Ad Hoc Wireless connection suddenly stopped working

Hi All,

My desktop computer builds an internet connection via a modem.
I connect my laptop with the desktop using a wireless card on the
laptop and a USB wirless adapter on the desktop (Ad Hoc wireless
mode).
I enabled ICS on my modem connection for the wirless connection.
Everything worked fine - until now.

Both wireless cards can see the other network and are able to connect.
If I e.g. change the encryption of one the other one is aware of the
change - so some basic communication seems to work. But when I try to
ping the other machine (desktop is 192.168.0.1 - laptop is
192.168.0.2) I only get "Request timed out".

Windows shows a good connection quality on both machines - but the
native card programs (netgear and d-link) both show signal strenth 0.

My firewall is not the problem since turning it completely off also
does not solve the problem.

This all used to work before...

Did anybody experience the same problem?
Does anybody have an idea what might be wrong here?
Can it be a hardware defect - how could I find out if it is one?

OS is Windows XP Professional on both machines.

Thanks for your help,
Martin.