If the process gets interrupted and the network light goes off, the connections are not properly established. In this case, I recommend you to verify all the connections and check this link in order to find a solution for this issue.
I'm getting this same error. I had an old Slingbox classic that was streaming analog cable channels from Comcast. I upgraded to Verizon FIOS and they have no analog channels (all digital) so I upgraded to the new Slingbox HD with the digital tuner.
I can connect and was able to update the firmware, but when I scan for new channels it scans through for a long time, gets to the point where it finds 50-something unscambled digital channels and then fails and says it can't find my slingbox.
It's not the connections. I had my old slingbox classic connected using the exact same network cable going to the exact same swtich at least a year and it worked fine. I can still swap the classic in and it works fine. I'm also an IT guy and know a thing or two about ethernet. It appears that the slingbox itself is crashing or timing out or something right before it completes the scan. Is this a known issue and is there a work-around?
This guy is seeing this too: https://community.sling.com/message/20652