Daft Question coming up -
I presume, from what you have said, that you, too, are also on a Wi-Fi connection between Computer and Router rather than both Wi-Fi and Cable?
Now that you have the new DNS addresses in the machine and applied these changes instead of trying the manual download try the Microsoft AutoUpdate route again.
Have you tried switching off your router and leaving it for a couple of minutes until all of the power has been discharged rather than do an immediate re-boot? Sometimes the router requires a bit of down-time to itself.
The only other thing that springs to mind is to turn off your AV Software since this could be blocking access to the server?
Dave