I had a similar problem with a Ralink-driver (2570). See bug
https://bugs.launchpad.net/ubuntu/+bug/237144.

I was able to get my network running again by downloading the latest
drivers from serial-monkey
http://rt2x00.serialmonkey.com/wiki/index.php?title=Main_Page.

I looks that the proper driver is not shipped with the kernel, so I have to 
recompile the project
each time I upgrade to a new linux-kernel

-- 
Wireless fails on ver 8.04
https://bugs.launchpad.net/bugs/236509
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