Is that an internal modem? Do you have an external modem or router that plugs into your computer, or that you connect to wirelessly (with the modem/router in another room)?

When you replaced the gnutella.net file & deleted the preferences folder, did you make sure that LW was properly closed first? And did you look for a preferences folder in both the old & new locations?
Go & find the gnutella.net file within the preferences folder...what size is the file (hover your cursor over the file & the size will show)?

I see you're still using Java 1.5.0_06...did you ever try either Java version shown in the 'if LW will not connect' thread??

You could try changing ports. In LW tools > options > advanced > firewall config. Change LW's listening port to 65000 (or other ports in the range of 49152 - 65535) > apply > ok.