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This error did cause me headache, after try after try. I found you need to turn off the proxy.
if your code is behind the proxy then pass
webrequrobj.proxy=null;
use this part before getresponse
reqFTP.Credentials = new NetworkCredential(Username, Password);
reqFTP.KeepAlive = false;
reqFTP.Proxy = null;
Same to the web service.
WSSimcentral.UtilityWebService ws = new WSSimcentral.UtilityWebService();
ws.Url = "http://xxx/_layouts/UtilityWebService.asmx";
ws.Credentials = System.Net.CredentialCache.DefaultCredentials;
ws.PreAuthenticate = true;
ws.Proxy = null;