Related to a post of mine ( How to retrieve a file from Internet via HTTP? ) about how to easily and robustly download a file from Internet, I have found a possible solution
Are you sure that you aren't hitting the INTERNET_OPTION_CONNECT_TIMEOUT? It will try to connect first, then receive.
In order to test the connect timeout, it must resolve, but never connect. In order to test the read timeout, it must connect, but never receive any data.
I generally set my connect timeout to 10 seconds, and the read timeout to 30 seconds. Anything longer than that, I consider down anyway.