I have a similar problem under Arch Linux since I upgraded to kernel 2.6.31.

My WLAN chip is:
Code:
# lspci -nn | grep "Wireless"
02:03.0 Network controller [0280]: Broadcom Corporation BCM4306 802.11b/g Wireless LAN Controller [14e4:4320] (rev 03)
Since I didn't used the b43-fwcutter after installing the new kernel, I don't think that the fwcutter is the culprit here.

I used to have a working WLAN button, but when I now (after the kernel upgrade) use this button, the WLAN is turned off, but cannot be turned on anymore.

I managed to get it working again by reloading the b43 module using rmmod and modprobe:

Code:
# rfkill list
0: phy0: Wireless LAN
	Soft blocked: no
	Hard blocked: no

** deactivated WLAN via button (WLAN LED is off now)

# rfkill list
0: phy0: Wireless LAN
	Soft blocked: yes
	Hard blocked: yes

** activated WLAN via button (WLAN LED is on again)

# rfkill list
0: phy0: Wireless LAN
	Soft blocked: no
	Hard blocked: yes

** WLAN doesn't work anymore

# rmmod b43 && modprobe b43

# rfkill list
1: phy1: Wireless LAN
	Soft blocked: no
	Hard blocked: no

** WLAN is working again
Maybe the "rmmod b43 && modprobe b43" works in your case too.