Z71,
With SDC, did you enter proxy information into SDC or does it use the pre-defined settings from IE?
You can check underTools -> Settings, Internet tab, Internet Settings button, if you do not know where the settings are.
I'm trying to come up a reproducible scenario and I'm not able to at the moment. I'm suspecting that I just don't have the right proxy configuration yet.
Also, if you open up the Impulse error log, does it show what errors you are getting. I believe before you were getting a 401 Access Denied error. I'm wondering if you are still getting the same error or soemthing new. To view the error log, right click on the question mark button in the upper right corner and chose "Veiw Error Log".