I also get the "Error for wireless request "Set Frequency" (8B04) : Set failed on device wlan0 : Invalid argument" when using wifi-radar however once I actually get connected to my router those error messages stop being displayed. I've just come to ignore them - call it "being ignorant"

. At this point, I wouldn't put too much weight on this particular "error".
I believe that your USB card issue is directly related to not having the HAL service running. You should be able to see if the hal service is running by issuing
ps -aux and looking for a service name with 'hald' in it. I asked you to stop the hal service because I had read (ubuntu forum I think) of someone having troubles with their wireless card (same chipset as yours) and it seemed that hal was interfering with functionality. You should be safe to re-enable this service, reboot, and make sure your usb card can be accessed again.
I do not use dhcp/d on my network so I don't dare make any suggestion in regards to that, but let's assume that this is a point of interest. I think your understanding of it and how it relates to your network is probably better than mine. I assign IPs to my local systems.
Your router log is VERY interesting. You say that repeated blocked attempts from IP 10.x.x.x show from the same time period as your tests. The IP range 10.x.x.x is a Class A local network address range (I think the ENTIRE range) which would mean that those "DoS attacks" were coming from your local network -- most likely your VL box you're on right now. I'm NOT suggesting that your system is compromised; I'm suggesting that (POSSIBLY) your system is being assigned an IP address in the Class A range (10.x.x.x) rather than Class C range (192.168.x.x). If the IP 10.241.160.1 is truely coming from your VL box then I would interpret that as saying your wireless radio is working and can communicate with your router; just need to figure out why it's 10.x.x.x rather than 192.168.2.x

My understanding of having an associated AP is that once you're connected to a wireless network then, and only then, will you have an associated AP. Since you cannot successfully connect to an AP then you do not have an associated AP. Again, THIS IS MY UNDERSTANDING/INTERPRETATION of an "associated AP".
From all this I see 2 points of interest (to start with

):
1) IP 10.x.x.x DoS attack on your router: I believe this is your D-Link card making these attempts.
2) Make sure DHCP/d is working correctly on router and on your system
Actually, those two points could very well be related to each other. If dhcp is not working correctly and is assigning an incorrect IP address in the range 10.x.x.x then it would explain both points. Since I have little experience with the dhcpd service in linux I don't dare make any recommendations to avoid you "spinning your wheels".
What I would do in your situation would be to test a static IP scenario on your local network; this takes dhcp/d out of the equation. Simply change your router configuration so that dhcp is turned off and set the IP range of your local nework, save your changes, and reboot the router. Then assign an appropriate IP address to your VL computer using wifi-radar - give it your desired IP address, netmask, gateway, dns (e.g. ip 192.168.2.101, n/m 255.255.255.0, g/w 192.168.2.1, dns1 192.168.2.1). Then attempt to connect to the router.
I hope this helps!