When using Microsoft Outlook (2007 or 2010) to automatically initiate a dial-up connection you may receive error 0x8004011d during the Send/Receive process. This problem occurs under Windows 7 when all network adapters are disconnected. Windows XP and earlier are not affected.
Outlook Connection Manager, which controls the outlook state (Disconnected, Connected or Offline), believes there is no connectivity to the Exchange server even once a dial-up connection is made. Eventually error 0x8004011d is reported.
The workaround is to ensure there is another network adapter connected, even if it has no connectivity to Exchange or other networks. This could be a Windows loopback adapter or an RJ45 loopback jack plugged into a network adapter. Alternatively manually initiating the dial-up connection before launching Microsoft Outlook will bypass the problem.
This bug has been acknowledged by Microsoft but given that it only effects dial-up connections and it’s not a security or data-loss bug it has been decided that it won’t be fixed. Outlook 2013 removed support for automatically initiating a dual-up connection so this error no longer applies there.