Having the same problem, got this from e-mail support, seems to correct things, even if only a temp fix for now, at least I can watch netflix:
"Currently WD is working with NetFlix to determine the root cause of this issue. A temporary solution is to perform a factory reset from within the User interface of the WDTV Live Plus unit. Once reset you will need to re-associate the unit with your Netflix account. This will not harm the unit, and may need to be performed 2 or 3 times."
One thing to note that when you reset, you will have to re-enter your password for YouTube or any other saved username and passwords, i did this reset and I was able to connect to netflix after the first reset, after that you will need to re-associate your WD TV Live media player with your netflix account.
As for the e-mail support, I got the answer in less then 24 hours, for me it was better the sitting on hold on the phone.