Java won't work - possible proxy issues?

Question

I was informed that one of our computers suddenly (from what I was told about 2 months ago) developed problems with Java. Said computer is on our dirty internet connection, so it's not readily checked or even updated. My colleagues looked at it, and evertually escalated the issue to me, since they couldn't figure it out. One specific website needs Java for some examinations, and it turned out Java just would present an error to the site.
After spending an afternoon at the location, testing with the Java verification applet on the Java website, and finding myself unable to correct the problem, I build myself a small test machine to see if I could recreate the problem on something local. Turns out, I can, which makes testing a lot easier. Do note: We want another site (which requires a heap of logins) to work, so I'm using the Java verification applet to get me a quicker and easier way to verify if Java works.
So, Got a clean install of Windows XP SP3, and updated to IE8. The machine is connected to the Internet through a proxy server based on FreeProxy which listens to port 2244 (note: this proxy has had NO changes in the aforementioned 2 months that I know of, or can trace within the proxy configuration). I can browse without any problems. Installed Java (7r51) on the system, and tried to verify the Java version.
Unable to verify if Java is installed and activated on your browser.
Ran all the Windows Updates (for XP, IE, .NET whatever version, and whatever more was available) Microsoft offers, just to make sure it's not in any of those. Still no go. Installed Google Chrome and Firefox to exclude the browser as a source of problems. None of the three browsers works with the Java verification applet, all resulting in the same message as stated above. Verified that Java is available in the browsers, and it is shown as available and active.
Deinstalled Java, reinstalled. Used JavaRA to remove and then reinstall. Pulled the security down to medium. Wiped the local cache files. There is no virusscanner installed, so that can't be it. Disabled the Windows Firewall to exclude that as a cause. Used a second machine with Windows 7 just to exclude the OS as a culprit. Verified the 'Enable Java in web browser' setting in the Java control applet. Played with the proxy settings and the security settings in IE and under the Java control panel. Wiped Java out, manually ran through the registry to kill references, and wiped all the Sun folders from all profiles, aswell as the Java install folder before reinstalling. Installed Java 6r43 just to make sure. Nothing helped.. The error keeps coming back, and the Java verification keeps failing.
The Java console which can help troubleshoot, seems to open while the Java icon shows up in the systemtray, but it quite rapidly (30 or 45 seconds) closes again, taking the Java console along with it, thus not giving me any logging to further see what's wrong here. So it seems Java is working, but runs into some problems along the way. About the only quick problems I spotted when I did manage to grab a copy of the log:
network: Cache entry not found [url:http://www.java.com/en/download/JavaDetection_applet.jnlp, version: null]
and
java.io.IOException: Server returned HTTP response code: 403 for URL: https://java.com/en/download/JavaDetection_applet.jnlp
My colleague noted that it did work on the other proxied network through the same proxy (just that that proxy is on a different NIC and listens to port 8080). We tried changing the proxy port for the network to 8080 on the actual PC on location, and found the problem remained. Just to make sure it worked on the other network, I reattached the PC to the other network, altered the proxy settings both under the IE options and Java control panel applet, only to see it exhibit the exact same behavior. So I'm dismissing my colleague, and assuming it has never really worked.
Most of the internet solutions I can find refer to changing the code of the applet, but since I'm using a sanctioned Oracle applet, and Oracle software, I suppose I can assume it's been programmed well, and tested properly. Besides that, as a user of Java I have no direct influence on the actual code being used, so all those solutions aren't really helping me any.
So I turn to this forum to see if anyone wants to have a guess at what is wrong here, and what I can do to either
1) Solve the issue
2) Provide some means to keep the Java console open or log to a file
3) Think of anything I haven't tried yet, that may have a positive impact on the issue.
Thanks in advance for your time, effort and help. Know that every response is already highly appreciated.

Answer 1

Thanks for the response...
I had a look about more logging on the proxy, and although http://www.handcraftedsoftware.org/index.php?page=faq&op=read&id=25 hints at a different program I might need to use (which has been removed of what I can see), the link http://www.handcraftedsoftware.org/index.php?page=faq&op=read&id=54 hints at there being some native logging I can use to verify what happens.
As such I located the log settings, and fired up the test system to see if I could determine some more from the logs (and exactly what those logs would entail). The log does provide some insight in what it pulls from the Java website, but doesn't show much in regards to what is going wrong:
Website:'www.java.com' URL:'/' From Client: 538 bytes To Client: 254 bytes
Website:'www.java.com' URL:'/nl/' From Client: 586 bytes To Client: 2514 bytes
Website:'www.java.com' URL:'/css/screen.css' From Client: 508 bytes To Client: 208 bytes
Website:'www.java.com' URL:'/css/print.css' From Client: 506 bytes To Client: 205 bytes
Website:'www.java.com' URL:'/css/ie.css' From Client: 502 bytes To Client: 207 bytes
Website:'www.java.com' URL:'/js/popUp.js' From Client: 503 bytes To Client: 152 bytes
Website:'www.java.com' URL:'/js/s_code_remote.js' From Client: 511 bytes To Client: 152 bytes
Website:'www.java.com' URL:'/images/jv0_search_btn.gif' From Client: 516 bytes To Client: 182 bytes
Website:'www.java.com' URL:'/js/global.js' From Client: 504 bytes To Client: 152 bytes
Website:'www.java.com' URL:'/js/subtlePager.js' From Client: 510 bytes To Client: 152 bytes
Website:'www.java.com' URL:'/images/jv0h.jpg' From Client: 509 bytes To Client: 185 bytes
Website:'www.java.com' URL:'/images/jv0h_greenfoot.jpg' From Client: 518 bytes To Client: 184 bytes
Website:'www.java.com' URL:'/images/jv0h_academy.jpg' From Client: 516 bytes To Client: 185 bytes
Website:'www.java.com' URL:'/images/jv0h_java.jpg' From Client: 513 bytes To Client: 185 bytes
Website:'www.java.com' URL:'/im/a.gif' From Client: 499 bytes To Client: 182 bytes
Website:'www.java.com' URL:'/images/jv0h_alice.jpg' From Client: 514 bytes To Client: 185 bytes
Website:'www.java.com' URL:'/images/jv0h_javamag.jpg' From Client: 516 bytes To Client: 185 bytes
Website:'www.java.com' URL:'/images/jv0h_bluej.jpg' From Client: 514 bytes To Client: 185 bytes
Website:'www.java.com' URL:'/images/jv0dl_a.png' From Client: 511 bytes To Client: 184 bytes
Website:'www.java.com' URL:'/images/jv0_oracle.gif' From Client: 513 bytes To Client: 183 bytes
Website:'www.java.com' URL:'/js/metrics_group1.js' From Client: 514 bytes To Client: 153 bytes
Website:'oracle.112.2o7.net' URL:'/b/ss/sunjava/1/H.19.4/s98129805908124' From Client: 872 bytes To Client: 663 bytes
Website:'www.java.com' URL:'/nl/download/installed.jsp' From Client: 881 bytes To Client: 2961 bytes
Website:'www.java.com' URL:'/im/ic_tipblue20x20.png' From Client: 776 bytes To Client: 183 bytes
Website:'www.java.com' URL:'/images/jv0_sidebar_bg.gif' From Client: 779 bytes To Client: 183 bytes
Website:'www.java.com' URL:'/images/jv0_sidebar_subhead.gif' From Client: 784 bytes To Client: 183 bytes
Website:'oracle.112.2o7.net' URL:'/b/ss/sunjava/1/H.19.4/s97891718594365' From Client: 1156 bytes To Client: 663 bytes
Website:'www.java.com' URL:'/nl/download/installed.jsp' From Client: 989 bytes To Client: 3657 bytes
Website:'oracle.112.2o7.net' URL:'/b/ss/sunjava/1/H.19.4/s98995092053347' From Client: 1247 bytes To Client: 662 bytes
Website:'www.java.com' URL:'/nl/download/installed.jsp' From Client: 947 bytes To Client: 2866 bytes
Website:'oracle.112.2o7.net' URL:'/b/ss/sunjava/1/H.19.4/s96218056013586' From Client: 1088 bytes To Client: 663 bytes
At around that same time I got the following notice in the connection log, which does seem to hint at a problem somewhere:
#11004: WSANO_DATA: Valid name, no data record of requested type.  H:02424 F:'HCSNTSocket_ResolveHostName' A:'gethostbyname' T:'Return=11004.'
Other then that I have not received any other logs (despite me enabling all of them, or any other notice that may indicate the cause of the problem. I will be leaving the settings in the proxy in regards of logging, just to see if any other logs are going to crop up.
I did post this to the Proxy-forum too to see if someone could help in determining what exactly the log is saying.