Open LW and go to Tools>Options>Speed, and tick the box beside "Disable Ultrapeer Capabilities", and click apply. Sometimes that will cause problems for people on a dial-up connection. You may need to restart LW for the changes to take affect.
Another thing you could do is call your ISP and ask them what their policy is reguarding file sharing programs. They may not allow file sharing, or maybe they only allow it during off peak hours.
You could try connecting LW with your firewall shut down. Just to rule that out. I don't recommend surfing the internet without a firewall, but you could try it as a test.
Thats about all I can think of right now. This link has advice on setting LW to best work with a dial-up connection:
http://www.gnutellaforums.com/showth...-up#post175733