I have had the same problem for two days. Tried to "publish all" until my mouse finger felt numb. I also tried to wuit all programs using internet (like safari, mail entourage firefox ftps etc).
After reading a lot of tips and tricks, especially Mark Heatons page
http://web.mac.com/mark8heaton/iWeb/PublishErrorsHelp/Publish%20Errors%20Help.ht ml
I finally decided to try deleting my "asset.[macusername].plist" file inside the domain.sites2 package. After this I performemed the 976th attempt to "publish all", and it worked!
Mind you it could just be a coincidence, I hesitate to try and recreate the problem to see if this really is the "FIX" for this problem, I'm just happy it worked. Give it a try and see what happens.
On a technical note: It seems that the plist file that I deleted somehow is related to my .Mac account and SHOULD not have anything to do with publishing apart from the sign in part in the beginning.
Good luck,
Bruno