Having worked in internet tech support, take it from me that if they tell you it's your firewall, they have no idea what's going on.

Just a note - the first thing you should always check is the length of the cable from your router to the phone line. Ideally it shouldn't be more than a metre in length, though up to 3 metres should be fine. Any greater and your ISP won't support you.

I think it's likely to be the distance from your local exchange that is causing your disconnections. The higher the speed of the connection, the smaller the distance needs to be in order to receive the full speed; to get 8Mbit, you probably need to be within 4km of the exchange, give or take a bit.

Excess noise is a by-product of distance issues. Here's an analogy:
I'm your local exchange, and I have some data to give you. The trouble is that we're in a big, crowded room filled with 20000 other people on the exchange. If you stand right next to me, I can easily pass that data to you, but if you're down the other end of the room, I have to shout over 20000 other people, so it will be far less reliable.

Broadband is the same, so greater distance means worse connections. This will manifest in slow internet, disconnections and simply no internet.

Another thing to consider is the power profile at your exchange. At your exchange, each house connection takes up a port. In order to reduce running costs, ISPs will limit the amount of power supplied to each port, based on the principle that the closer the house, the less power required. It often goes wrong though, and they end up limiting power to ports that hold connections of a larger distance.

The good news is that your USB router probably isn't helping. USB routers/modems tend to be quite underpowered compared to ethernet/wireless ones if they don't have an external power supply. The reason for that is that they need to draw their power from the USB port itself.
On that note, USB1.* isn't helping either. If you don't upgrade your router, you should definitely get a USB2.0 PCI card.

So here's what I would do:
  • Ask for a noise test, an attenuation test and a distance test from your ISP and ask for the results to be emailed to you.
  • Ask about what power profile you have and whether it could be too low.
  • Make sure that nobody else is using your username - this will disconnect you.
  • If nothing comes of the above steps, try replacing the cable from your router to the phone line.
  • Try getting a USB2.0 PCI card. It probably won't cost more than $10.
  • If that doesn't work, try a friend's ethernet router if you can borrow one. If that works your router is unsuitable for your new plan.