Currently Being ModeratedJul 13, 2013 6:48 AM (in response to mleonard1565)
Thank you for providing so much information about the issue you are experiencing when your Apple TV is connected through an ethernet cable. I recommend reviewing the following article for an issue like this:
Thank you for using Apple Support Communities.
Currently Being ModeratedJul 16, 2013 3:48 PM (in response to sheila_m.)
I have roughly the same problem as the OP except that I have an Apple TV 3 running the latest version 5.3 (6105) and iTunes 11.0.4 (4) runs on my MacBook (late 2008) running OS X 10.8.4. When the Apple TV is connected by ethernet it will only show as an Airplay device after I have restarted it. Once it goes to sleep it will not wake up by itself when I try to use Airplay on my MacBook, iPhone or iPad. I've tried switching the Apple TV over to wifi and everything seems to work as expected but like the OP I would prefer to use ethernet.
This behaviour has only manifested itself since the Apple TV was upgraded to software version 5.3 so I suspect that the fault was caused by this upgrade. I have looked at the documents suggested by Sheila M. but these have not been of any help as once the Apple TV has been restarted everything works OK.
I have tried restoring the Apple TV and have restarted my router (one of the latest Time Capsules) and my older Time Capsule which extends the wifi at the other side of my house.
I have reported the problem to Apple through the feedback pages so I hope that this issue will be investigated by them and cured in a future upgrade of the software.
I would be interested in knowing if the OP still has the problem and if not how it was cured.