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The reason that you are not fully on xbox live after recovering your gamertag is because the gold subscription has ran out. The reason for your xbox not having your offline account is because you probably moved your account to your hard drive along with your saved games. If you cannot connect to xbox live, go buy a cat5 cable and connect it to your modem and it should connect you to xbox live so that you can download the update.
Have you clicked test connection and have it tell you why it cant connect?? If it cant connect to the xbox Live and its not a connection problem, Live might be down, you could be banned, there may be an update you need. Most of the time you cant connect there may be a temporary maintenance for live. If you still cant connect call xbox customer support and ask about your account.