Hi rizzz86,
Is your system configured to use a proxy server ? You can find this from Internet Settings in Control Panel. On the Connections tab, click LAN settings.
Check the solution 2 and 3 from the KB : http://helpx.adobe.com/x-productkb/policy-pricing/activation-network-issues.html
Try using a network sniffer application or proxy application (Charles, Wireshark, or some other application) to grab the network traffic (HTTP, TCP/IP, SOAP, and others). Look for errors like HTTP 404, 405, or 407 in the HTTP. Look for authentication error denied due to bad password or other errors.
Regards,
Rave