This is definitely a connectivity error, 80072EFD translates to "Error_Internet_Cannot_Connect".
This is normally caused by Firewall applicatios blocking outbound traffic. We see in your log above that "sending" is receiving the 80072EFD error:
WARNING: Send failed with hr = 80072efd.
2009-10-06 21:35:54:020 1144 1348 Misc WARNING: SendRequest failed with hr = 80072efd. Proxy List used: <(null)> Bypass List used : <(null)> Auth Schemes used : <>
Here's a really good article with steps to try:
http://support.microsoft.com/default.aspx/kb/836941
Also this one is pretty good:
http://support.microsoft.com/kb/956196/en-us - This one is "Page cannot be displayed" but the troubleshooting is still accurate for this issue.
I hope this helps.
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