Im currently installing oblivion again, since I would like to try the Shivering Isles expansion before Skyrim arrives, however I cannot install the DLC I bought and downloaded through Bethesda's store. The reason is that every time Ive typed in the activation code, I get the message: "the activation server is currently unreachable."

Does anyone know how to resolve this matter?

Call beth, and chat with tech support. If you bought the DLC's a while back, chances are good that the installers are looking for a server that no longer exists.... at least, not for what the installer has in mind.

Another alternative would be pick up Universal Extractor, and use it to extract the necessary files from the archive.