Ethernet is active, and symbol is showing, however there is no internet connection.

Hello.

I've been searching for answers for AGES now, and I can't seem to find it.

So I'm going to ask it myself. I have an: Apple iMac OSX Lion 10.7.4 with 4GB's of RAM. I've had it for 7 Months now. Here's the problem:

Currently, I am using my Ethernet cable to connect to the internet and type this question. Strange thing is, the Ethernet symbol in the top bar where stuff like File, Edit, View and those things are shown, is blank. I've disabled Wi-Fi, so it's blank on the inside. Yet going to System Preferences --> Network Settings --> and checking the status of the Ethernet, states it is working. I check how the Internet is doing, and it's fine. Now I would leave that and maybe get help later if there wasn't this other problem. I want my iPod Touch to recieve my iMac's connection as well. So I enable internet sharing. As soon as I do so, the Ethernet symbol is now showing. But now the Internet doesn't work. Loading up safari or chrome is hopeless. When I search something on Safari, one section of the URL bar lights up as it should, and that's it. It doesn't even go to the part when it says 'Network Diagnostics'. 😢 I've tried doing Network Diagnostics through System Preferences, but all it says is 'Network Diagnostics cannot solve this problem', or something like that. Then I clicked the other option which was 'Assist me'. I made a new network, and the Ethernet symbol on the top bar went blank again, and internet seems to be working fine again. The Internet Sharing still seems to be enabled, but it's not giving my iPod Touch internet connection. Well, I assume this is a very strange Networking issue, and I hope you can help me. Help Is Greatly Appreciated. 😁

BTW, This problem occured only months ago.