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GFLW is still 100% operational for now
Contact Xbox support for your issues
That sounds more like the GFWL install tehre is scrweed up.
For asy checks, ensure your hosts file is not corrupted, and try switching your DNS to GoogleDNS or OpenDNS
If the above easy stuf doesnt help reinstall GFWL
1) Uninstall GFWL
2) REBOOT (DO NOT SKIP THIS)
3) Download GFWL from microsoft.com
4) Install GFW
5) REBOOT (DO NOT SKIP THIS)
Sorry, I just re-read your OP and see that you can login to website :(
P.S. Dont forget to turn on 2-step verification once your done. Good Luck
It took me 7 days of contacting support for this issue to be resolved all thanks to a clued in support member.