A step 3 failure? Bah. Google something like "network card cannot ping self" .. A card that cannot ping itself, even when it is assigned an IP address could point to bad drivers or a bad TCP/IP stack. None of which are enjoyable to fix.
If you did have a virus, it is possible it obliterated your TCP/IP stack - although a tad unlikely. (if it destroyed TCP/IP, how could it connect to its control server?)
I would check drivers. Can you ping 127.0.0.1 (loopback device)?