I think I may have found the culprit. Believe or not, it's FS2 Open.
I just tried connecting to FS2NetD using 3.6.9 RC6 less than 10 minutes ago. As expected, it hanged for a while then gave me the dreaded "connection failed" again. I switched to Tom's build (removing cmdline_fso.cfg in the process because it causes error with the OEB) and tried connecting again. Lo and behold, less than 3 seconds in and I'm looking at the lobby screen. At this point I am really scratching my head wondering what exactly happened. Why can't 3.6.9 RC6 establish a connection while the OEB can? Could it be something I put in the config file?
Just in case, here's the content of my cmdline_fso.cfg:
-ambient_factor 18.3 -spec_exp 16.7 -spec_point 0.6 -spec_static 0.9 -spec_tube 1 -spec -glow -env -jpgtga -mipmap -2d_poof -missile_lighting -img2dds -no_vsync -cache_bitmaps -targetinfo -orbradar -rearm_timer -ballistic_gauge -3dwarp -warp_flash -snd_preload -alpha_env -mod mediavps
EDIT:
NVM. After some fiddling, it seems that you can't connect to FS2NetD with the media vps activated. Probably something to do with table/model mismatch or whatever. I hope the new PXO would support media vp files though.