That 100%Java statement on the first page of the Toonel site is wrong, although I took it at face value
Your .NETversion of Toolnet works by trapping port 8080 on your local IP address 127.0.0.1 and pretending to be a proxy server. Presumably it does this to do the local data decompression. It looks like whatever this local proxy does is not compatible with the HTTP library.