You could also try that router on another ADSL enabled line and see if the green light comes on. Have you tried it with nothing else plugged into your home phone network, including any Sky boxes? Just one filter and the modem?
Is your exchange unbundled? If not, you can try logging onto the bt network: username you enter into your modem is bt_test@startup_domain (no password) which will let you connect to the BT network and cut AOL out of the loop. If you get an IP, then that limited account will let you navigate to
http://www.bt.net/digitaldemo/ If that works you can go back to AOL and tell them not to point the fingers elsewhere, but only if your exchange isn't unbundled for AOL.