1) The modem could still be bad. PCI modems are not true modems and require proprietary drivers to work properly. Have you uninstalled/reinstalled the modem driver? If you have to replace the modem, I would replace it with an external serial modem. They are the easiest to configure/troubleshoot and connect at the fastest speed.
2) Don't know. When I encounter problems like this I just wipe the hard drive and reinstall everything.
I have a couple of the original 56K internal hardware modems that came out. Both work well but since they require ISA slots I can't put them in my later computers. I keep one old computer ready with one of those as backup in case I have a problem with my cheap modems.