I ran into this issue as well...
It seems that the phone is not resolving DNS properly. I can go to the terminal and ping whatever IP address on the internet, but when I ping a name, it won't resolve it.
I tried SBF and do the OTA update. But by some reason my phone won't allow me to do USB debugging. The option is there, and I can check it, but when I plug in the phone to the PC via USB, it won't give me the debug icon.
So, I'm kinda stuck, because I can't root my phone.