Unable to download iOS updates

I'm having issues with downloading iOS updates through iTunes. I tried downloading iOS 4.3 and recently 4.3.1 but no luck with either. Every single time I download an update through iTunes I get an error once the file has reached 100%. The error that I get is:
"There was a problem downloading the software for the iPhone. The network connection timed out."
I also get an error code beside the update in iTunes. The error code is 3259.
I spent a lot of time on Google trying to find a solution but nothing. It seems like the common issue is that a virus scanner or firewall is preventing the file from being properly processed. I don't have a firewall or anti-virus enabled, so I know this isn't the issue.
I'm on OS X 10.6.7 with iTunes 10.2.1 (latest versions for both).
To me this issue doesn't have anything to do with my iPhone. It has something to do with iTunes or a setting on my computer. Has anyone else experienced this problem?

You've got an iPhone 4, correct? Here's a link for a direct download of the iOS 4.3.1 file. Download it directly & follow the instructions to install on your phone:
http://osxdaily.com/2011/03/25/ios-4-3-1-download/
I suspect something wrong with your iTunes installation. After you update your phone, follow these instructions to completely remove iTunes & reinstall it. Things must be done in a certain order:
http://support.apple.com/kb/HT1224

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