So far as your original message "unable to reach..." make sure DNS is resolving correctly and no firewalls are blocking outbound access. If your organization requires outbound to go through a proxy take a look at
http://www.vmtown.com/vsphere-host-update-utility-proxy-configuration/ .. this is for Vsphere 4, but likely will be similar on 3.5. I unfortunately have a 3.5 installed anywhere anymore. In any event I think a re-install of the VI client and Update Manager may give you opportunity to configure a proxy if that is what is needed.
