I'm sure it's not anything related to the router and encryption method because the phone wont even show the available wifi networks. Wifi toggle is turned on but no networks shown, and the toggle cannot be turned off, even in airplane mode. Rebooting fixes it, but its quite annoying.
Which CM9 build are you using? On 8/19, I haven't had that issue in quite awhile (since late September or early October). It just stopped happening after awhile.
Of course, now that I've typed that, it will probably happen this afternoon.
When it was still happening frequently, I got into the habit of usually switching WiFi off when I leave the house; I often still do, mainly to conserve battery. (My battery has been in almost constant use for almost two years, so a full charge is not nearly what it once was.)