I have been following this thread since the beginning, but I have not seen anything that might explain or cause this problem.
Due to the nature of this problem it's really difficult to pin-point one specific thing and focus on it.
If you can upload and fxp I don't think windows firewall or SP2 is conflicting with FlashFXP. Although at this point in time anything is possible.
The only option left that I can think of is maybe some sort of remote desktop sharing so that I can monitor and see extactly what happens go from there.
btw have you both tried the beta release of FlashFXP v3.1.10.1067?
http://www.flashfxp.com/download-beta.php
While this is a beta release performance and stablity appears is excellent.