Thank you very much for your help. It ended up being that some how a proxy was turned on. A fellow co-worker has seen this a lot lately that malware is putting in a proxy. As soon as I clicked off the proxy the internet worked fine.
Firewall blocking port 80? What O/S? +SPs? When static IP did you enter manual DNS? Test using NSLOOKUP. Does PING resolve text based URL? Assuming Internet is available...
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