Looking at two different sections of your log, it appears that it is timing out:
2/28/2012, 11:17:46 GMT -> Progress Update: DOWNLOAD_BATCH_START: Files to download: 1, Estimated total size: 0
2/28/2012, 11:17:46 GMT -> Progress Update: PRE_CONNECT: Proxy: "http=10.200.40.131:8080" Agent: "Symantec LiveUpdate" AccessType: 0x3
2/28/2012, 11:17:50 GMT -> Progress Update: PROMPT_RAS_DIALUP:possibly prompting the RAS dialogue...
2/28/2012, 11:17:50 GMT -> Progress Update: CONNECTED: Proxy: "http=10.200.40.131:8080" Agent: "1Vqg74nhoZvpXioI0M9AzFxqrwkxLdMTwAAAAA" AccessType: 0x3
2/28/2012, 11:17:50 GMT -> Progress Update: DOWNLOAD_FILE_START: URL: "http://liveupdate.symantecliveupdate.com/ET/liveupdate_3.3.1.19_english_livetri.zip", Estimated Size: 0, Destination Folder: "C:\Documents and Settings\All Users\Application Data\Symantec\LiveUpdate\Downloads"
2/28/2012, 11:18:35 GMT -> CSendHTTPRequest::SendRequest - Timed out while communicating with server.
2/28/2012, 11:18:35 GMT -> Progress Update: DOWNLOAD_FILE_FINISH: - NOTE - URL: "http://liveupdate.symantecliveupdate.com/ET/liveupdate_3.3.1.19_english_livetri.zip", Full Download Path: "C:\Documents and Settings\All Users\Application Data\Symantec\LiveUpdate\Downloads\liveupdate_3.3.1.19_english_livetri.zip" HR: 0x802A0045
2/28/2012, 11:18:35 GMT -> HR 0x802A0045 DECODE: E_UNABLE_TO_REACH_SERVER
2/28/2012, 11:18:35 GMT -> Progress Update: DOWNLOAD_BATCH_FINISH: HR: 0x802A0045, Num Successful: 0
2/28/2012, 11:18:35 GMT -> HR 0x802A0045 DECODE: E_UNABLE_TO_REACH_SERVER
2/28/2012, 11:18:35 GMT -> EVENT - SERVER SELECTION FAILED EVENT - LiveUpdate failed to connect to server liveupdate.symantecliveupdate.com at path /ET via a HTTP connection. The server connection attempt failed with a return code of 1814, LiveUpdate could not retrieve the catalog file of available Symantec product and component updates.
It's also having issues that our KB suggests may be related to ISA 2006:
2/28/2012, 11:18:35 GMT -> Progress Update: DOWNLOAD_BATCH_START: Files to download: 1, Estimated total size: 0
2/28/2012, 11:18:35 GMT -> Progress Update: PRE_CONNECT: Proxy: "http=10.200.40.131:8080" Agent: "1Vqg74nhoZvpXioI0M9AzFxqrwkxLdMTwAAAAA" AccessType: 0x3
2/28/2012, 11:18:35 GMT -> Progress Update: CONNECTED: Proxy: "http=10.200.40.131:8080" Agent: "1Vqg74nhoZvpXioI0M9AzFxqrwkxLdMTwAAAAA" AccessType: 0x3
2/28/2012, 11:18:35 GMT -> Progress Update: DOWNLOAD_FILE_START: URL: "http://liveupdate.symantec.com/ET/liveupdate_3.3.1.19_english_livetri.zip", Estimated Size: 0, Destination Folder: "C:\Documents and Settings\All Users\Application Data\Symantec\LiveUpdate\Downloads"
2/28/2012, 11:18:35 GMT -> CSendHTTPRequest::SendRequest - Unhandled WinInet Error occurred: err= 12152; desc = The server returned an invalid or unrecognized response
2/28/2012, 11:18:35 GMT -> HttpSendRequest (status 500): Request failed - The LiveUpdate server encountered an error, which prevented it from completing the requested operation.
2/28/2012, 11:18:35 GMT -> Progress Update: DOWNLOAD_FILE_FINISH: - NOTE - URL: "http://liveupdate.symantec.com/ET/liveupdate_3.3.1.19_english_livetri.zip", Full Download Path: "C:\Documents and Settings\All Users\Application Data\Symantec\LiveUpdate\Downloads\liveupdate_3.3.1.19_english_livetri.zip" HR: 0x802A002A
2/28/2012, 11:18:35 GMT -> HR 0x802A002A DECODE: E_HTTP_SERVER_ERROR
You may be able to connect to the address via a browser, but it is having trouble actually doing the download. Can you bypass LiveUpdate's URLs at the proxy?
sandra