Wow, thank you for posting this. This worked for me too.
I'd tried calling technical support and got someone in India who wanted to fix my registry and actually said, "You know I'm working with a computer too, and you need to do maintenance and let me remotely fix this for you." I told him my Avast worked fine before the update, couldn't he just tell me how to fix my connection to the server problem? He said he'd put me on hold and have a technician help me in a few minutes. I said, you're telling me you want to fix my registry, but you can't tell me how to fix my connection problem?" Needless to say, the conversation ended soon afterwards.
Thanks again for the post-
I had the same problem and solved it this way:
-Go to add/remove programs
-On the listing for Avast select Add/remove
-click on proxy settings
-select Direct connection (no proxy)
-click ok, then cancel, then yes
Hope this helps you solve your problem.