I've already searched the forums and supposedly this issue was solved here.
Evidently, it isn't. I'm getting the same problems as in the aforementioned thread. As soon as my Gold subscription expired yesterday, I am unable to connect to Xbox LIVE with my Silver account gamertag. My console itself has no problem connecting to Xbox LIVE, but as soon as I try to connect with my gamertag, it disconnects. I tried deleting my gamertag and re-downloading it, and that's where I got the 800704DC error message. I can't even recover my gamertag now!
This needs to be fixed now....again.