What message are you getting from PSO? If the light turns off on the modem when you try and connect then usually that means everything is working, including the line voltage inducer. I believe I sold you two line voltage inducers though so it might be worth trying the other one to see if that makes any difference.
Also, if you're using PSO v.2 then you'll need to use the Sylverant patcher disc
every time you want to connect. If you're using a burned copy then you need to make sure it's patched to connect to the Sylverant server.