Well we just received an email from Kaspersky two days before they said they would get back to us, Thank you :-)
This is what they had to say:
Their Workaround...
Thank you for contacting Kaspersky Lab Technical Support.
I apologize for the issues you have been having and want to help you get this sorted out. We already received an update from our escalation team. This is a known bug and it will be fixed in next maintenance that will be released within a few weeks. The current workaround is as follows:
1) Please enable hidden files and folders display:
Windows XP: http://www.microsoft.com/resources/documentation/windows/xp/all/proddocs/en-us/win_fcab_show_file_extensions.mspx
Windows 7/8/8.1: http://windows.microsoft.com/en-us/windows7/change-folder-options
2) Right-click on the Notepad icon on your desktop OR click on the Windows Start Menu and right-click on the Notepad icon found there, and in either case then click on “Run as administrator”.
3) In Notepad, click on “File” then “Open…” and under “Text Documents ”.
4) Then browse a path to: C:Windows\System32\drivers\etc and select the “hosts” file, below the text lines that are already there enter the following two entries, each on a separate line:
185.85.13.154 gc.kis.scr.kaspersky-labs.com
185.85.13.154 ff.kis.scr.kaspersky-labs.com
Name the file hosts.hst
Change the "Save As Type" option to "All Files"
Press Save
Please check the issue...
**UPDATE**
Confirmed now that error is no longer there, Thank You Kaspersky :-)
The question remains do we need this w/a any longer once the update is applied?
We'll update...
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