Cannot Display Page, applications have no network connection. ping is

Hi,

I recently started to have an issue where I cannot access the internet on my PC. The network shows as connected and I can ping and tracert websites and IP's succesfully, but Firefox, IE, Windows Live Messenger and any other application cannot get connectivity. I have tried starting in Safe mode with networking and still have the same problem. I have reset and bypassed my router and tried a direct connection to modem after a reset and still the same issue. I can connect no problems with another computer on this network and right now I am able to access the internet using Windows XP Mode in Windows Virtual PC. Any suggestions?
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More about cannot display page applications network connection ping
  1. Try reseting your router. There usually is a switch on the back.
  2. I've tried resetting and powercycling the router with no luck. I've also tried direct connection with the modem and that hasn't worked but it will with my other PC
  3. I've noticed in my Event Viewer that I have the following entry a few times "There was an error while attempting to read the local hosts file."

    I've checked my Hosts file and it looks like this:

    # Copyright (c) 1993-2009 Microsoft Corp.
    #
    # This is a sample HOSTS file used by Microsoft TCP/IP for Windows.
    #
    # This file contains the mappings of IP addresses to host names. Each
    # entry should be kept on an individual line. The IP address should
    # be placed in the first column followed by the corresponding host name.
    # The IP address and the host name should be separated by at least one
    # space.
    #
    # Additionally, comments (such as these) may be inserted on individual
    # lines or following the machine name denoted by a '#' symbol.
    #
    # For example:
    #
    # 102.54.94.97 rhino.acme.com # source server
    # 38.25.63.10 x.acme.com # x client host

    # localhost name resolution is handled within DNS itself.
    # 127.0.0.1 localhost
    # ::1 localhost
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