Can't access microsoft websites or Windows Updates

For quite some time now (months), sometimes I can't access any microsoft related website or make a connection with the Windows Update servers. The rest of the internet, if I may say so, works perfect. Occasionally, it works for some time and everything is normal. But the it reverts, the browser showing me Server not found - the browser can't find the server at *insert microsoft site here*

I checked my PC for viruses and malware with Kaspersky 2012, Spyware Doctor, Malwarebytes and Combofix - I have none.

Any ideas how to fix this problem? Is there any chance that microsoft would sometimes block some countries or have bad connectivity? Or it could be a problem with my Romanian ISP?

I'm using Palemoon, but this problem occurs in every browser I have installed - IE 9, Chrome, Palemoon, Firefox and Chrome. And I doubt that mirosoft would block their own website on IE.

I ran a Diagnostics check with IE 9 and is says that the DNS server isn't responding.

Using default Windows Firewall. Tried it, no change.

What does your hosts file read like?

and what DNS servers are you using?

:O only 1 line:
127.0.0.1 localhost

I guess this is the work of Combofix. Don't see a problem here.

What dns servers?

Here's a screenshot:

Try changing to opendns or google dns. These are opendns addresses

208.67.222.222
208.67.220.220

and these are google dns

8.8.8.8
8.8.4.4