New WiFi dongle received from PilotAware Support, but I have the same problem. On outbound flight everything worked normally. At destination PAW was powered off, Nexus 7 tablet left running. For return flight, I could not establish a connection to the WiFi hotspot, though audio traffic messages were being received normally, and the Nexus was detecting other ground-based WiFis, even when airborne. Back at base, after both had been shut down, I tried again after about 30 min - connection established!
So doesn't appear to be anything to do with Device Connect Setting. Is there some connection within the PAW that I should be looking at? I did have it apart before this flight to make sure that the board was pressed fully home.