TL;DR; Explains issues connecting to TFS via HTTPS from behind an ISA proxy, including proxy authentication errors and ServicePointManager limitations, with suggested workarounds.

I have a number of CodePlex projects that I connect to from work and I have had a problem since 2008 that it does not always send my authentication to the proxy server (ISA). What this manifests as is that I get a popup telling me that “Proxy authentication is required”. The workaround was to connect in offline and then click the connect button and everything invariable works with no additional problems.
With Visual Studio 2010 the mater is slightly different. It pops up with a vague error that I had not seen before, but a little searching seamed to indicate that it may be the proxy problem rearing its ugly head in a killer way.
So the “ServicePointManager does not support proxies with the https scheme” error has been seen before when connecting to Windows Communication Foundation services through a proxies. The fix is code based, so that is not something that I can achieve, so I have raised a bug on Connect.
If you are experiencing this problem, then please add your support to the work item:
BUG: Unable to connect to TFS using HTTPS over the Internet from behind ISA
If you've made it this far, it's worth connecting with our principal consultant and coach, Martin Hinshelwood, for a 30-minute 'ask me anything' call.
We partner with businesses across diverse industries, including finance, insurance, healthcare, pharmaceuticals, technology, engineering, transportation, hospitality, entertainment, legal, government, and military sectors.

Akaditi

Sage

Milliman

Graham & Brown

New Signature

Teleplan
CR2

Jack Links

Genus Breeding Ltd

Illumina

Flowmaster (a Mentor Graphics Company)

YearUp.org

SuperControl

Kongsberg Maritime

Boeing

ProgramUtvikling

Deliotte

Freadom

Washington Department of Transport

Royal Air Force

Nottingham County Council

Ghana Police Service

Department of Work and Pensions (UK)

New Hampshire Supreme Court
Boxit Document Solutions

Schlumberger

MacDonald Humfrey (Automation) Ltd.

Brandes Investment Partners L.P.

Cognizant Microsoft Business Group (MBG)

New Signature