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I also have this exact same problem with the newest version! I have ICS 4.0.3 on my phone and it gives me the same 502 error over 3G using the "Android" stream mode. Wi-Fi with "Android" mode or switching to FFMpeg works fine. I have no anti-virus programs installed on my device. I do have a task-killer but it only activates every 30 minutes. I tried both the paid and free versions. (Seems like it might be a 4.0.3 bug?)

The lack of seeking on FFMpeg is a real downer so if you could get FFMpeg seeking working and/or 3G "android" mode fixed, I would be so happy.