Can't Download iPhone Apps - Network Connection Times Out?

Having problem downloading apps from iTunes for my iPhone 3GS via my desktop computer running Windows XP on a network with a Windows Server 2003 and a T-1 Internet connction.  The apps appear as "available for download" on he iTunes page. The connection starts but nothing downloads.  Error message says "network connection timed out." I checked password and is fine. I checked with IT guy who confirmed we have no firewall issue.  He thought probles was with ISP but ISP says there no proxy or any blocking.  When I try downloading directly to iPhone via WiFi in same network,  (via Linksys 54G router)  I also have the same problem.  Yet, if I turn off the WiFi, the apps download fine to the phone.  (I also cannot stream YouTube videos or Pandora music to the iPhone via the WiFi though those do appear to work on the desktop).  Any ideas?

Thanks Diesel. But as I wrote above that is what I suspected.  So I had my IT guy come in to double check and he confirmed that the firewall was off and that we do not use a proxy. I also ran the diagnostic from iTunes Help and re connectivity it reported firewall off and no proxy. I connect fine to the iTune Store and to the update server, etc. only timeout when downloading purchases from store.  My IT guy thought problem was with our ISP. But I opened trouble ticket with them and they reported back that they are not blocking a d ran traceroute from their server at NOC to iTunes with no problem.  They suggested was a password issue with iTunes but I double-checked and confirmed that is not the problem...

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