I just resolved this problem for a client, and thought I'd go back and post the info on the threads I ran across looking.
It's probably an issue with anti-virus software, usually Symantic products, being corrupted. Fully remove the software using the windows installer clean-up tool and symantic software removal tool if you have symantic products.
You can test to see that this is the problem by booting in safemode with networking. If it works in safemode this is probably the problem, if it doesn't it's probably something else.
OlyComputers
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He already reset winsock and TCP/IP. He is obviously connected to the internet/network since web services other than browsers work and he's able to ping, and this is a common problem when uninstalling symantic software (which he clearly stated he did)
And I really don't know what you're talking about with the 169.354 thing. Just about anything can be a valid IP depending on whether you're connected through a router or directly to a modem.
OlyComputers
Practically a Master Poster
611 posts since Jun 2008
Reputation Points: 124
Solved Threads: 36