I am not too familiar with the PIX, but on other Cisco hardware "Line UP protocol DOWN" means that the PIX interface is configured to be ACTIVE, but the physical interface is not seeing a connection to anywhere. On an Ethernet interface on a Switch or Router this would most likely mean that the cable on that port is not plugged into anything, possibly because a Crossover cable is needed instead of a straight-through cable. On a WAN interface it could also mean that the WAN type is not configured correctly (EG: line encoding).
From memory a PIX acts as a DTE device, the same as a Router, whereas a Switch is a DCE device. This means that the 3500 Switch to PIX link needs a straight through cable, and the PIX to 2600 Router link needs a Cross-over cable.