iPad 2 Home Sharing

I have looked and looked but am yet to find an answer....
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I have an iPad 2
Time Capsule and Airport Express set up as a Network
And an Apple TV 2
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I have created a network with time capsule and airport express - used adsl for initial Internet setup.
I no longer have adsl.
I can acess home sharing on apple tv 2 and play ALL content. When I connect my ipad2 or iPhone 4 to my network, I can acess and view my library. I cannot however play movies and tv shows. I keep getting the error "file cannot be played"
WHY IS THIS?
There was one time I managed to play movies and tv shows on my iPad via home sharing, but for some reason it does ot do it anymore. I have looked and looked and cannot find a solution to this!!!! Do I need to have an active Internet connection or is there some way around this? As I said, it did work on it's own by the grace of God - but no now..... No luck.
Please someone help!!!