I had to put a little effort into get Steam to work on my Ubuntu 12.04 Install (Video Drivers update crashed me) so when it stopped working I fought it to get it back up and running. The error I kept getting was "Could not connect to Steam network. This could be due to a problem with your internet connection, or with the Steam network. Please visit www.steampowered.com for more info."
Well my Internet Connection wasn't the problem and I didn't see any outcry that Steam was down so it had to be something on my system. I uninstalled and reinstalled from the Ubuntu Software Manager and even downloaded the Steam .deb file, all with no luck.
The answer was to use the Terminal Command Line to reset Steam. Here's how;
1. Start TERMINAL
2. Type
steam --reset (HIT ENTER)
3. Wait for this command to run completely
(it will download all the Steam System files again.)
4. Re-enter your UserName and Password and you're good to go.
This should not affect your Steam Game Library but I cannot guarantee it as I only had one game downloaded and installed when I crashed and I deleted it when I tried to "fix" Steam before I found the reset command. USE AT YOUR OWN RISK!