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My borther has got a Linksys WRT54GS v5.1 and 7 out of 10 times there electric goes off, for whatever reason it reset the router back to default settings, so it stops the wireless connecting and also reset the password. It is about a year old.
Sounds to me like the built in Flash might be faulty, if this is the case then there is really no way of fixing it, might be time to bite the bullet and buy a new one unless it's less than a year old and will still be under warranty
You could also save the configuration file from the WRT54G, then simply re-upload it every time this happens. If it is still under warranty, get it swapped out, even if it is out of warranty, argue it's not fit for purpose and did not last anywhere near it's expected lifetime.