We investigate the linear and nonlinear viscoelasticity of a model polymer nanocomposite of fumed silica nanoparticles in poly-(ethylene-co-alpha-butene) (PEB). Above a critical filler fraction, a space-filling network builds up as a result of cluster agglomeration and causes the material to change from liquid-like to solid-like states. Using the Winter-Chambon criterion, the percolation threshold from the measured dynamic moduli is found to depend strongly on the matrix viscoelasticity even when the particle dispersion is identical. Such phenomenon comes from the implicit assumption in the method that the contribution from particles (or particle agglomerates) should dominate the dynamic moduli, which is usually inapplicable when polymer has a high viscosity (or elasticity). A new method is suggested to decompose the moduli of composites into the hydrodynamic part and the part from particle agglomerates by taking into consideration the different effects of particles on the strain rate and stress. The two portions are shown to depend on oscillatory frequency, which are adopted to extrapolate the dynamic moduli to lower frequency. The percolation threshold from these extrapolated data becomes independent of the matrix viscoelasticity. Furthermore, it is found that the appearance of nonlinear behavior in oscillatory shear is related to the portion of particle agglomerates in storage modulus and the strain rate is the key factor to destroy the structures.