Q: Home Sharing / wifi stops working

I have a appleTV (gen 3) and a iMac 2010 edition.  Up until a month or two ago I would stream itunes movies through home sharing to my appleTV and idevices.  I plug my internet ethernet cable into my iMac and then internert share through wifi to my appleTV and i devices.  Now home sharing doesn't work if I put a WPA protection on my internet sharing.  If I leave the wifi sharing with no password then home sharing works but the internet stops working.  I don't understand why the internet will not go through if there is no password on the network but as soon as I put a password on it works but then homesharing stops working ....So I am trying to get my appleTV (gen 3) working again.  Any thoughts??