  X-ray spectra of AGN often contain signatures indicative of absorption in
multiple layers of gas whose ionization-state and covering fraction may vary
with time. It has been unclear to date how much of the observed X-ray spectral
and timing behavior in AGN can be attributed to variations in absorption,
versus variations in the strengths of emission or reflection components.
Diagnostics of the inner regions of AGN cannot be reliably performed until the
origin of observed effects is understood. We investigate the role of the X-ray
absorbers in the Seyfert 1 galaxy NGC 3516. Time-averaged and flux-selected
spectroscopy is used to examine the behavior of NGC 3516 observed in Chandra
HETG and XMM data from Oct 2006. New H-like and He-like emission and absorption
features discovered in the Fe K regime reveal a previously unknown zone of
circumnuclear gas in NGC 3516 with log xi ~ 4.3 and column density 1E23 cm^-2.
A lower-ionization layer with log xi ~2 and of similar column density is
confirmed from previous observations, this layer has a covering fraction around
50%, and changes in covering provide a simple explanation of a deep dip in the
light curve that we interpret as an eclipse of the continuum due to passage of
a cloud across the sight line within half a day. These inner zones of absorbing
gas are detected to have outflow velocities in the range 1000-2000 km/s, this,
and constraints on radial location are consistent with an origin as part of a
disk wind in NGC 3516.
