Windows – Proxy Error Accessing a TFS server from TeamCity

We're running TFS for our source control and TeamCity for our build server running on Windows 2008.

Everything was working fine, but I believe some network issues occurred, and now our TeamCity build agent can't access TFS. It is getting the following proxy error:

ERROR – The proxy name could not be resolved: '[a proxy server
name]'

Some more details:

• Not sure where the proxy server is coming from. I can't ping it, and it doesn't seem that other users are getting routed through it
• When I log remote into the box, I can access the TFS server from my session, so it seems that it's using different proxy settings for me than the TeamCity process.
• If I change the Team City services to run under my network account, they still get the same proxy error message.
• I believe it should be an intranet connection. They are accessing each other through a FQDN of MachineName.SubDomain.Domain.com, where subdomain and domain are the same.
• The services are running under Local System. We do not have a dedicated NT account for them to run under, and this was all working fine for months.

Is there some setting that controls whether services go through a proxy for intranet access? I don't think I can log in as Local System directly and start mucking with the IE proxy settings.

Thanks