It has taken a while, but my problem is finally solved. I did speak with a telphone support person from Apple (THANKS Kathy). She very patiently worked through a series of troubleshooting steps to try and resolve the issue and had several references to the Apple support engineers along the way. Unfortunately, everything offered and tried proved uncuccessful (updated to latest version of iTunes; turned off firewalls, turned off AV software, tried selective startup procedure, started iTunes in SafeMode, fully uninstalled all Apple software and reinstalled, updated PC drivers and firmware, followed all possible steps from TS1421. My internet connection was proxied, but turning it off was not an option. iTunes on another PC moved to the same network connection worked fine. An instance of iTunes in a virtual machine on my original PC also worked fine.
In the end, the problem lay with my IP stack or network configuration somehow, although I can't say exactly what. The fix occured after I tried the computer on another network. It worked there and then when connecting it back to my original network (with no configuration changes from original), it worked. I guess the IP stack or some network cofiguration files must have gotten flushed/refreshed/reset by the network change and now everything is back to normal.
