I got Netflix working!!
I did a manual inter net connection with a manually assigned IP Address. Direction from nintendo on how to found here.
I tested netflix right before I did this... and it didn't work... I was just browsing through some things, and even though I did not get this error code, I gave it a shot. As soon as I was done, the connection test took a little longer than usual, but Netflix started working!
And as for ACNL, it took a little longer to load than usual for the Dream Suit, but it worked too!
All I can guess is that when I did the system update, it messed with the IP Address the 3DS was using before. Causing it to use an unstable or un reliable or slow IP... Thus, allowing some inter net options to work. But not all...
I am just happy it is working now. <3
Hope this information helps other people!