I've had similar issues.

You might want to see https://bugs.maemo.org/show_bug.cgi?id=2082

Seems that it can get swamped by either presence of too many APs, or 802.11n.

I've repeatedly been able to get around the issue using the "body shielding" approach - while reasonably close to my AP, I hold the N770 tight in to my body, draw my legs up and basically shield it as much as possible. Then search for connections, it finds mine, and it connects fine.

Once it is connected it behaves itself fine.

You could also try the "stainless steel mixing bowl" approach reported in bug #2082.