Super fab so far!! :-)
Well so it turns out that it wasn't the directory restriction in open_basedir that was blocking the downloads, or any faulting security permissions setting on files/folder for the ISR_ / Network Service blocking WP from accessing files.
It was my policy for Security Configuration Wizard that was way to strict and was blocking/had shut down ports. I reverted the policy back to the old settings and POOF! - everything worked again :-)
I haven't really figured out yet what ports that was blocked and my top suspect is that it was the ftp ports, since my ftp server wasn't accessible either. Neither from the Internetz or by local (LAN) connection or through the Administration tool. I've been googgling a bit and done some fast research and I'm now under the impression after reading a bit that WordPress uses the built in PHP ftp function to communicate with wordpress.org when trying to download plug-ins and such?
Am I on the totally wrong side of track here with that theory?
Oh.. .by the way does anyone happen to know what executable PHP uses for ftp connections - it isn't the php.exe itself - is it??
The ting is that I need to make and exception for that process responsible for WordPress's ftp connections in my security policy so can run a tight ship. It would be AWESOME to get the part straight also!
Thanks a lot in advance.