Issue with MyEclipse Proxy Connection - eclipse

Question

I am unable to get MyEclipse to connect to the marketplace. I am aware of the proxy setup. These are the steps I followed within a proxy environment and within a direct environment.
A. Within the Company Network. (browers use automatic configuration script)
Chose Native option. Does not work.
Chose Manual option. Set the domain, username. Opened the proxy script to figure out available proxy servers. Verified independently that these proxy servers work. Does not work.
Modified the vmargs to provide the http host, user, password and port properties. Does not work.
Did steps 1-3 with restarts of Eclipse.
B. Within home environment. (Direct connection to internet)
Tried Direct Option. Does not work.
Tried Native Option. Does not work.
The error message that I constantly see (through error logs) is this.
java.lang.reflect.InvocationTargetException
at org.eclipse.epp.internal.mpc.ui.commands.MarketplaceWizardCommand$3.run(MarketplaceWizardCommand.java:203)
at org.eclipse.jface.operation.ModalContext$ModalContextThread.run(ModalContext.java:121)
Caused by: org.eclipse.core.runtime.CoreException: HTTP Server Unknown HTTP Response Code (-1):http://marketplace.eclipse.org/catalogs/api/p
at org.eclipse.equinox.internal.p2.transport.ecf.RepositoryTransport.stream(RepositoryTransport.java:161)
at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
at sun.reflect.NativeMethodAccessorImpl.invoke(NativeMethodAccessorImpl.java:39)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:25)
at java.lang.reflect.Method.invoke(Method.java:597)
at org.eclipse.epp.internal.mpc.core.util.AbstractP2TransportFactory.invokeStream(AbstractP2TransportFactory.java:35)
at org.eclipse.epp.internal.mpc.core.util.TransportFactory$1.stream(TransportFactory.java:69)
at org.eclipse.epp.internal.mpc.core.service.RemoteMarketplaceService.processRequest(RemoteMarketplaceService.java:141)
at org.eclipse.epp.internal.mpc.core.service.RemoteMarketplaceService.processRequest(RemoteMarketplaceService.java:80)
at org.eclipse.epp.internal.mpc.core.service.DefaultCatalogService.listCatalogs(DefaultCatalogService.java:36)
at org.eclipse.epp.internal.mpc.ui.commands.MarketplaceWizardCommand$3.run(MarketplaceWizardCommand.java:200)
... 1 more
Caused by: org.eclipse.ecf.filetransfer.BrowseFileTransferException: Could not connect to http://marketplace.eclipse.org/catalogs/api/p
at com.genuitec.pulse2.common.http.ecf.PulseRetrieveFileTransfer.openStreams(Unknown Source)
at org.eclipse.ecf.provider.filetransfer.retrieve.AbstractRetrieveFileTransfer.sendRetrieveRequest(AbstractRetrieveFileTransfer.java:889)
at org.eclipse.ecf.provider.filetransfer.retrieve.AbstractRetrieveFileTransfer.sendRetrieveRequest(AbstractRetrieveFileTransfer.java:576)
at org.eclipse.ecf.provider.filetransfer.retrieve.MultiProtocolRetrieveAdapter.sendRetrieveRequest(MultiProtocolRetrieveAdapter.java:106)
at org.eclipse.equinox.internal.p2.transport.ecf.FileReader.sendRetrieveRequest(FileReader.java:349)
at org.eclipse.equinox.internal.p2.transport.ecf.FileReader.read(FileReader.java:213)
at org.eclipse.equinox.internal.p2.transport.ecf.RepositoryTransport.stream(RepositoryTransport.java:153)
... 11 more
Is there any alternative or any other step that I can take to resolve this problem. I know I can go through the manual update by downloading the plugin and all. But I really want to solve this issue.
MyEclipse Version Information:
MyEclipse Blue Edition
Version: 10.7.1 Blue
Build id: 10.7.1-Blue-20130201

Answer 1

Apparently it could be a bug.
I just read this whole bug report here.
I tried adding the VM arguments to ensure the the HTTPClient workaround can be achieved via a configuration change. Did not work.
However, I was able to remove the http client libraries from the plugins folder, courtesy Comment #27 and #29 on the bug report.
Now I'm able to connect over proxy and direct as well.