I have a similar problem. I used LW here from Aug 26th to about two days ago when I started being unable to get any kind of connection. I'm fairly certain it's not a SP2 problem since I've had that for awhile now and I've been using LW with the XP Firewall on. I've turned it off since I've been having the problem and LW still tells me I am blocked by a firewall.

My only guess is the network I'm on has their own firewall. Is there any way I can turn it off locally or configure it to allow LW?