A solution at last!
I have this same problem on a new MacBook Air running OS X 10.9.4
Wifi says it is connected and the diagnostics show that it is working fine but the status indicator drop down says it is "Looking for Networks" every 5 seconds. Trying to work remotely is a nightmare since I was constantly being tossed out. It was not my router, since my iPad has no problem connecting and staying connected. This had nothing to do with waking from sleep, since it occurs after a hard reboot. Turning bluetooth off had no impact. I finally found a fix on another thread (thank you LindsayfromLondon) that seems to be working.
Go to system preferences>network and switch off the "show wifi status in menu bar" then click it back on.
Took me hours of searching to find this solution. Hope this helps someone else.