I am also facing the same problem. Here are all lines from the setup.log file.
11.11.2008 14:18:07.000 1226393287 general SelectCurrent: selected server 'Download676 AVAST Server' from 'main'
11.11.2008 14:18:07.000 1226393287 internet SYNCER: Type: use IE settings
11.11.2008 14:18:07.000 1226393287 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:18:30.000 1226393310 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:18:30.000 1226393310 general InvalidateCurrent: invalidated server 'Download676 AVAST Server' from 'main'
11.11.2008 14:18:30.000 1226393310 general SelectCurrent: selected server 'Download910 AVAST Server' from 'main'
11.11.2008 14:18:30.000 1226393310 internet SYNCER: Type: use IE settings
11.11.2008 14:18:30.000 1226393310 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:18:55.000 1226393335 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:18:55.000 1226393335 general InvalidateCurrent: invalidated server 'Download910 AVAST Server' from 'main'
11.11.2008 14:18:55.000 1226393335 general SelectCurrent: selected server 'Download935 AVAST Server' from 'main'
11.11.2008 14:18:55.000 1226393335 internet SYNCER: Type: use IE settings
11.11.2008 14:18:55.000 1226393335 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:19:19.000 1226393359 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:19:19.000 1226393359 general InvalidateCurrent: invalidated server 'Download935 AVAST Server' from 'main'
11.11.2008 14:19:19.000 1226393359 general SelectCurrent: selected server 'Download100 AVAST Server' from 'main'
11.11.2008 14:19:19.000 1226393359 internet SYNCER: Type: use IE settings
11.11.2008 14:19:19.000 1226393359 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:19:42.000 1226393382 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:19:42.000 1226393382 general InvalidateCurrent: invalidated server 'Download100 AVAST Server' from 'main'
11.11.2008 14:19:42.000 1226393382 general SelectCurrent: selected server 'Download211 AVAST Server' from 'main'
11.11.2008 14:19:42.000 1226393382 internet SYNCER: Type: use IE settings
11.11.2008 14:19:42.000 1226393382 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:20:05.000 1226393405 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:20:05.000 1226393405 general InvalidateCurrent: invalidated server 'Download211 AVAST Server' from 'main'
11.11.2008 14:20:05.000 1226393405 general SelectCurrent: selected server 'Download920 AVAST Server' from 'main'
11.11.2008 14:20:05.000 1226393405 internet SYNCER: Type: use IE settings
11.11.2008 14:20:05.000 1226393405 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:20:07.000 1226393407 internet tried 10 servers to get file 'servers.def.vpu', but failed (0x20000004)
11.11.2008 14:20:07.000 1226393407 file GetNewerStampedFile:GetFileWithRetry failed: C:\WINDOWS\TEMP\_av_proI.tm~a02092\onefile, servers.def.vpu, error: 0x20000004
11.11.2008 14:20:07.000 1226393407 package Download servers.def, servers.def.vpu failed with error 0x20000004.
11.11.2008 14:20:28.000 1226393428 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:20:49.000 1226393449 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:20:49.000 1226393449 general InvalidateCurrent: invalidated server 'Download920 AVAST Server' from 'main'
11.11.2008 14:20:49.000 1226393449 general SelectCurrent: selected server 'Download203 AVAST Server' from 'main'
11.11.2008 14:20:49.000 1226393449 internet SYNCER: Type: use IE settings
11.11.2008 14:20:49.000 1226393449 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:21:10.000 1226393470 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:21:10.000 1226393470 general InvalidateCurrent: invalidated server 'Download203 AVAST Server' from 'main'
11.11.2008 14:21:10.000 1226393470 general SelectCurrent: selected server 'Download214 AVAST Server' from 'main'
11.11.2008 14:21:10.000 1226393470 internet SYNCER: Type: use IE settings
11.11.2008 14:21:10.000 1226393470 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:21:33.000 1226393493 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:21:33.000 1226393493 general InvalidateCurrent: invalidated server 'Download214 AVAST Server' from 'main'
11.11.2008 14:21:33.000 1226393493 general SelectCurrent: selected server 'Download953 AVAST Server' from 'main'
11.11.2008 14:21:33.000 1226393493 internet SYNCER: Type: use IE settings
11.11.2008 14:21:33.000 1226393493 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:21:56.000 1226393516 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:21:56.000 1226393516 general InvalidateCurrent: invalidated server 'Download953 AVAST Server' from 'main'
11.11.2008 14:21:56.000 1226393516 general SelectCurrent: selected server 'Download932 AVAST Server' from 'main'
11.11.2008 14:21:56.000 1226393516 internet SYNCER: Type: use IE settings
11.11.2008 14:21:56.000 1226393516 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:22:19.000 1226393539 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:22:19.000 1226393539 general InvalidateCurrent: invalidated server 'Download932 AVAST Server' from 'main'
11.11.2008 14:22:19.000 1226393539 general SelectCurrent: selected server 'Download660 AVAST Server' from 'main'
11.11.2008 14:22:19.000 1226393539 internet SYNCER: Type: use IE settings
11.11.2008 14:22:19.000 1226393539 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:22:42.000 1226393562 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:22:42.000 1226393562 general InvalidateCurrent: invalidated server 'Download660 AVAST Server' from 'main'
11.11.2008 14:22:42.000 1226393562 general SelectCurrent: selected server 'Download623 AVAST Server' from 'main'
11.11.2008 14:22:42.000 1226393562 internet SYNCER: Type: use IE settings
11.11.2008 14:22:42.000 1226393562 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:23:05.000 1226393585 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:23:05.000 1226393585 general InvalidateCurrent: invalidated server 'Download623 AVAST Server' from 'main'
11.11.2008 14:23:05.000 1226393585 general SelectCurrent: selected server 'Download212 AVAST Server' from 'main'
11.11.2008 14:23:05.000 1226393585 internet SYNCER: Type: use IE settings
11.11.2008 14:23:05.000 1226393585 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:23:28.000 1226393608 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:23:28.000 1226393608 general InvalidateCurrent: invalidated server 'Download212 AVAST Server' from 'main'
11.11.2008 14:23:28.000 1226393608 general SelectCurrent: selected server 'Download669 AVAST Server' from 'main'
11.11.2008 14:23:28.000 1226393608 internet SYNCER: Type: use IE settings
11.11.2008 14:23:28.000 1226393608 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:23:52.000 1226393632 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:23:52.000 1226393632 general InvalidateCurrent: invalidated server 'Download669 AVAST Server' from 'main'
11.11.2008 14:23:52.000 1226393632 general SelectCurrent: selected server 'Download504 AVAST Server' from 'main'
11.11.2008 14:23:52.000 1226393632 internet SYNCER: Type: use IE settings
11.11.2008 14:23:52.000 1226393632 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:24:15.000 1226393655 internet ERROR:HttpGetWininet, catch returned 0x00002EFD
11.11.2008 14:24:15.000 1226393655 general InvalidateCurrent: invalidated server 'Download504 AVAST Server' from 'main'
11.11.2008 14:24:15.000 1226393655 general SelectCurrent: selected server 'Download79 AVAST Server' from 'main'
11.11.2008 14:24:15.000 1226393655 internet SYNCER: Type: use IE settings
11.11.2008 14:24:15.000 1226393655 internet SYNCER: Auth: another authentication, use WinInet
11.11.2008 14:24:17.000 1226393657 internet tried 10 servers to get file 'servers.def', but failed (0x20000004)
11.11.2008 14:24:17.000 1226393657 file GetNewerStampedFile:GetFileWithRetry failed: C:\WINDOWS\TEMP\_av_proI.tm~a02092\onefile, servers.def, error: 0x20000004
11.11.2008 14:24:17.000 1226393657 package Tried to download servers.def but failed with error 0x20000004.
11.11.2008 14:24:17.000 1226393657 package LoadAllDefs failed 0x20000004
11.11.2008 14:24:17.000 1226393657 general Err:Cannot connect to download504.avast.com (75.126.53.170:80).
11.11.2008 14:24:17.000 1226393657 package Transferred: files 22, bytes 0, time 467282 ms
11.11.2008 14:24:17.000 1226393657 package Retries: total 20, files 2, servers 21
11.11.2008 14:24:17.000 1226393657 package Submit: files 0, bytes 0, time 0 ms
11.11.2008 14:24:17.000 1226393657 package Submit success: files 0, bytes 0, time 0 ms
11.11.2008 14:24:38.000 1226393678 internet Sending stats '
http://download79.avast.com/cgi-bin/iavs4stats.cgi': 20000004 0
11.11.2008 14:24:38.000 1226393678 file NeedReboot=false
11.11.2008 14:24:38.000 1226393678 general Return code: 0x20000004 [Cannot connect to download79.avast.com (75.126.53.165:80).]
11.11.2008 14:24:38.000 1226393678 general Stopped: 11.11.2008, 14:24:38