Hahah! 'Local Connections: 1'? So there's someone else out there trying to login to the game with the patch at the same time? I find that hilarious (I wonder if it's me, I still have 1.0 installed on my system. ).

Considering 1.0's updates were handled by P2P, it's not surprising, the patcher is searching players with the game installed to patch instead of searching SE's own 1.0 patch server (which is almost definitely offline).