[oNatsuo]

I have had the same problem~ The "Error: Connection Failed" message and I have managed to fix it~
I am using Windows XP Service Pack 3, it should work very similar or even the same on Windows Vista and Windows 7 if you look around the options~

Go to the Start Menu (press the Windows key to open it) - "Control Panel" - "Internet Options", then go to the "Connections" tab, once you are in it click on the "LAN settings" option around the bottom~
If everything is un-checked, check the "Automatically detect settings" only~

Another way to get into Internet Options is to go into Internet Explorer, press alt and click on "Tools" - "Internet Options" to get in~

That is what fixed it for me~
Livestream Procaster uses Internet Explorer settings to connect, if those are messed up or using a proxy, despite your internet working for your other browsers and games, it simply won't work~
So always make sure that your Internet Explorer isn't set on the "Work Offline" mode and that it can connect to the internet, to deactivate it simply press alt again and click on "File" - "Work Offline", it is deactivated when there is no small check mark next to it~

Hope that helps you~ ^^