I have a console application that communicates with a web service. Both of them are on the same machine.

When I am accessing the web service with the LAN disabled, it connects without a problem. But if the LAN is enabled and connected to our office network, I receive this error:

"HTTP 407 Proxy Authentication required - The ISA Server requires authorization to fulfill the request. Access to the Web Proxy service is denied."

We've been hunting the source of the problem for three days now. We have tried everything that we can think of. Any ideas what's causing the problem?

Additional notes:
- The machine is in a Workgroup setup but with DNS suffix (computer.local). When accessing the web service, we type the address as "<http://machine.computer.local/service.asmx>"

* I talked to the IT guys and they said that we don't have an ISA server installed
* There is no "proxy" set in IE.
* The machine is in mint condition.