Hey I had this issue as well and I am also IT person. This is a firewall issue. Reset your firewall settings on your router/modem and this should resolve the timed out issue.
PLEASE DO NOT FLAME - IM OFFERING THIS AS AN ALTERNATE TO WHAT YOU ARE GOING THROUGH - I HAVE USED THIS IN MY OWN HOME AS WELL AS WHILE WORKING IN THE MMO INDUSTRY OVER THE LAST FEW YEARS. HOWEVER AS WITH ANYTHING YOU TRY NOT DIRECTLY RECOMMENDED BY SONY USE THIS AT YOUR OWN RISK I ASSUME NO LIABILITY. I will however answer any questions I can.
So, a couple of things about networking in general. Wireless Networking is great for the interwebz not so much for gaming. The internet uses a switch tactic for providing data
Click on a link - modem looks for that address for the link and waits - information comes back and it throws it on your browser - then goes idle, or may try and update every so often. think of it like a CB or walkie talkie.
Gaming will usually is a bidirectional connection.
Esablished a connection with the games server and starts feeding data of your location in game as well as others in game. think of it like a telephone.
This is why you dont hear terms like lag unless your gaming... when youre surfing generally its called hanging if the web page locks.
First things first ALWAYS TRY RESTARTING YOUR CONNECTION HARDWARE!!! This one step can save you a lot of time unplug the power cable from teh back of the modem and or router wait thirty seconds plug em back in, and then wait til they are active. If you have to use this tactic over and over then id recommend a "firmware update".
IF you are going to play WiFi - which can be done, but most companies will recommend against it... You want to make sure for your consoles you set up a "DMZ" on your router IF you use one. you can find info on that on the routers mfg. website. Also ensure you are set up to Wireless B mode - this is a more stable SLOWER connection not so slow that it will cause lag but slow enough to not need to be right on top of the wireless router - in essence the faster the carrier signal the more chance for data corruption and the more lag is possible. This cna also be found on your routers website.
If you are using a wireless modem/router combo. comntact your ISP for help with the aove configurations (wireless B mode/DMZ.)
If you just have a modem and thats it - these wont apply to you unless the modem has an internal firewall in which case contact the ISP.
WHATS A DMZ?!?!?! The term means DeMilitarized Zone - basically its a special instruction set that tells the router to allow a specific IPaddress/Hardware to connect unhindered - it means you dont fall under packet snooping you pass through all the firewall craziness. I do not take any responsibility for you trying this out, if you arent sure ask for help, and definitely do not use this sugestion on anything but your PS3.