Found the answer and it worked! I Googled 'computer is refusing Proxy server.' The search brought me to Yahoo answers and I followed the directions and it worked:

Control Panel-Internet Options-Connections-Lan. Turn off any reference to proxies, configuration files or similar.

I was back on line immediately. I have to assume the virus or Trojans changed my settings? I'm hoping the computer is safe to use now.

Jane

for future reference if you open your malwarebytes program there is a tab called logs you can just click on there to view the logs.

I usually only post when I have questions or need help, but thought I would let you know I got hit with something similar on Saturday, and someone who works with my husband got hit yesterday at the office. I should have know better than to click the "firewall message" asking if I wanted to block the connection.

I could not run my antivirus or malwarebytes. After a lot of cussing (including badmouthing AVG free antivirus) and trying online scans and scanning with avg in safe mode, which found nothing, I did a restart and clicked on the avg icon as soon as I saw it come up in the system tray. It was able to run as it should then and quarantined the trojan. I have a new respect now for AVG.

(The Windows Live Onecare scan identified the trojan as fakespypro, but there was no button to click to take care of it. This microsoft security site shows exactly what was coming up on my computer. It doesn't mention that the trojan also kept trying to open a porn site in a new tab.)

Here is a link that might be useful: microsoft security fakespypro

with any of these type rogue infections I urge people to go to a malware removal support forum and tell them what has happened what was done and ask to have them check the pc to see if all was cleaned. These infections are notorious for leaving things behind which you do not want.
Analysis and Malware Removal

Right! Just because the symptoms are gone does not always mean all the infected files are gone.

Thanks Raven & Zep. I've been worried that my computer is not completely clear. I will ask at landzdown - I see a bunch of others there with the same thing going on right now.

just be sure you do not follow the directions given for anyone else they are very very specific to the individual that they were given for.

always start a new thread of your own.

I also had a trojan problem. I had screens flashing and quickly closed them. Avast did not find anything, so I scanned with Malwarebytes and it found trojan.fakealert. I checked it out on the net then quarnteed it.

Karla, I did the same thing. One of the screens which popped up looked just like AVG, which is my AV. It was running a scan but there were smaller windows which looked like Windows and said,'security alert! your computer has a virus, you must update your antivirus. It had the colors of a Windows warning with the red X and blue background.

The AV scan was zipping along with these alerts popping up. I was so confused, luckily I didn't react immediately (which is what I tend to do), I sat and looked at the windows and realized the scan (which looked exactly like AVG) was not AVG. It was missing the 'G'. The top of the screen just said AV. When I saw that, I knew the other boxes weren't Windows.

I couldn't X anything or stop the scan. I tried to open AVG but it wouldn't open. I tried Malwarebytes, no luck. I then tried to shut down the computer and the Start button wouldn't work. More pop-ups all over the place. I manually shut the computer off.

When I restarted, I did the same as Karla. I clicked on Malwarebytes immediatelly before the other processes started. It instantly grabbed 3 items before it scanned (thought that was odd). After the scan it showed 7 items:
Trojan horse Fake AV.CDC
Virus identified Exploit PDF
Trojan.Fraudepack AV Suite
Rogue.AVSecurity Suite
Temp Files IE5 Rogue AV Security Suite.

I don't know how to show the log. I might reinstall Windows and be done with this. It was very upsetting.

My netbook seems to work normally but the proxy settings were changed and it has frozen a few times.

Jane

yes what you got hit with was the AV Security Suite rogue as seen here.
AV Security Suite

what you see when you think it is doing a scan is NOT a scan at all it is just a picture of a scan it is NOT your pc being scanned, this is how all of these work. When you are seeing any of that activity the only thing to do is to hit control alt delete and shut down or just hit the power button. You Do NOT want to click on anything because what you will be clicking is to install it, no matter that it looks like an x to close it or it says close or end etc everything you can click on will be an install command. Never click anywhere. Just use the task manager to end the browser task or shut down the pc. It is click jacking. Of course they also hope you fall for it and will give them your credit card info too.

I highly recommend again to go to the forum I mentioned and ask for assistance explain what has happened and what you had and what you did. There are scans that can be run to make sure you are clean. Some of these new rogues are installing some really nasty stuff, back doors, rootkits etc.

AV Security Suite as shown on the SeriURz blog, just take a look there at the sheer number of these things.

Make sure you have everything updated on your pc including adobe, flash, java etc run a secunia scan to check
Secunia Online Software Inspector (OSI)

Raven thanks for telling us how to get out of a situation like that. I just clicked the X in the upper right hand corner. The only thing I remember seeing was a windows alert window.

you are welcome, there was an excellent article a while back in the Register by Jesper M. Johansson that showed step by step exactly what was happening behind the scenes when you are hit with one of these things. Every thing you see is fake, the scan is fake, the pictures that appear and the warnings all fake. In fact I run linux, I can go to one of the sites that trigger that rogue and I too will see the exact same pictures you are seeing which is a dead giveaway since linux does not have that type of file system structure. And of course it would not install on linux. Everyone sees the exact same thing no matter what pc it is happening to.

here is that article a very valuable one to read and remember.
Anatomy of a malware scam

One thing I wanted to also comment on is letting anyone else use your pc when it is in admin mode, that is a very very dangerous thing to do. You know how you handle things but others may not react the same way you do to something suspicious.
I NEVER let anyone access my computers in admin mode, I create a guest account with very limited access and they can use it in that mode. They will then not be allowed to install anything.
It is easy to just set up a Guest account on your pc and keep your admin account and password totally secured and untouched.
It is actually very smart computing to never run in admin mode but to always use a limited user mode. Vista and 7 are moving in that direction with the UAC.
User Account Control

it is standard operating procedure in linux.

Thanks Raven, as usual your enormous help is so appreciated. I did try to close the scan but nothing closed. I didn't think of Task Manager. If I hadn't told Zone Alarm to 'allow' this wouldn't have happened. I tried the Start Button and it wouldn't let me shut down. Being the first time I had to deal with this, I now know better.

I do keep a guest account on my netbook because it sits on the kitchen counter and everyone uses it. I always forget to log off my account. I am the only admin and do have my 'log on' passworded. Of course, everyone knows it but family have their own log ons and use their own. I think what happened was my house guests went on the Guest account but I was not logged off mine. They just switched users.

When I have time, I will go to the sites mentioned and run those scans. I had trouble updating Flash and don't think it is updated. Firefox kept blocking the update. I don't know about Java either.

Thanks you again,
Jane

Thanks for the link to landzdown. I posted my problem and followed their instructions. I think my computer is OK now, but I still have some updating to do.

I have been watching the progress, glad you did go there since you did still have some infection. Good work. Stick with them till you are told all done.