Hi Loren,
I seem to be running into this same issue. Would you mind sharing your updated code with me?
IWebProxy webProxy = WebRequest.GetSystemWebProxy();
webProxy.Credentials = new NetworkCredential("<username>", "<password>");
WebRequest.DefaultWebProxy = webProxy;WebRequest.DefaultWebProxy = new WebProxy("http://<myProxyHost>:<myProxyPort>", true) // secong arg=true to bypass on local
{
    Credentials = new NetworkCredential("<username>", "<password>")
};WebRequest.RegisterPrefix("http://www.arcgis.com", new WebRequestCreateThroughProxy());
public class WebRequestCreateThroughProxy : IWebRequestCreate
{
    private static readonly WebProxy _webProxy;
    static WebRequestCreateThroughProxy()
    {
        _webProxy = new WebProxy("http://<myProxyHost>:<myProxyPort>", true)
        {
            Credentials = new NetworkCredential("<username>", "<password>")
        };
    }
    public WebRequest Create(Uri uri)
    {
        var webRequest = WebRequest.CreateHttp(uri);
        webRequest.Proxy = _webProxy;
        return webRequest;
    }
}<system.net> <defaultProxy enabled="true" useDefaultCredentials="true"/> </system.net>