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I don't know if a similar answer has been given before, but I'll still post it – maybe it will help someone.
I had a problem where two computers on a local network had the same version of Heroes 3 installed, and they played normally for a long time. Then, they updated to the Observer's version, and suddenly! Everything freezes when trying to connect. Even on the old version!
I tried resetting the TCP/IP settings, deleted all versions, and installed a regular build with the HD mod. Now everything works.