The error message when proxy auth fails (behind a windows ISA server) is no longer suitable for showing the actual issue.

With 1.308 you see
java.io.IOException: Unable to tunnel through proxy. Proxy returns "HTTP/1.1 407 Proxy Authentication Required ( The ISA Server requires authorization to fulfill the request. Access to the Web Proxy filter is denied. )" at sun.net.www.protocol.http.HttpURLConnection.doTunneling(Unknown Source)
...

With 1.363 you see
java.net.ProtocolException: Server redirected too many times (20) at sun.net.www.protocol.http.HttpURLConnection.getInputStream(Unknown Source) at hudson.model.UpdateCenter$UpdateCenterConfiguration.testConnection(UpdateCenter.java:603) at hudson.model.UpdateCenter$UpdateCenterConfiguration.checkUpdateCenter(UpdateCenter.java:456)
...

From this it looks like the update center is broken and not the proxy authentication that is incorrect.

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