Hi
It's my understanding that, as FC3 is shipped, up2date and yum both use the same repo list, in yum.cfg.
have you tried using yum ?. Its probably better to use that to get your system update while investigating the problem with up2date
If you mean to suggest that they use the same repositories it is true but up2date users /etc/sysconfig/rhn/sources and not the yum configuration file however there are instances where one tool fails to work while the other one does for various reasons. Your other suggestions are something worth trying
regards Rahul