Avast Internet Security Update June 29th 2016 breaks internet connection

Problem - network is unidentified and cannot be fixed by TCPIP stack reset
Cause - A Driver was installed by Avast on June 29th and the problem appeared immediately afterwards even though the diagnosis was not made until today
Client PC - Gigabyte Z87 UD3H - network adapter is Intel - driver is dated 2013 (so a driver update is available)
OS - Windows 7 HP 64

A client called to tell me he was unable to receive email and that an Avast error message popped on boot which indicated that it could not protect email or something on that order. I did routine troubleshooting over the phone (restart the gateway and disable / enable the network adapter) but these steps did not help. After that it seemed prudent to call the internet provider which was done. Their troubleshooting indicated that the gateway was working and the problem was with the computer.

Troubleshooting the issue on site, I reset the network stack - no effect - and then decided to do a system restore to the last date the PC was working. Then it became apparent that Avast was the culprit. The recommended restore point was June 29th and the identifying remarks were installation a Avast Device Driver… System restore failed and the PC blue-screened. Next was a reboot to safe mode and removal of Avast IS. After that, the PC has been operating normally.

Looking at the event log, I found these apt messages:

  1. The name “ENDUSER-PC :20” could not be registered on the interface with IP address 10.0.0.4. The computer with the IP address 10.0.0.8 did not allow the name to be claimed by this computer

  2. The server could not bind to the transport \Device\NetBT_Tcpip_{32FDAA92-090C-4FEF-B9BF-3C1FB11FD002} because another computer on the network has the same name. The server could not start.

Considering that this is the only PC on the network, this indicates that somehow the device installed by Avast was responsible for claiming the IP address / network and that the Intel adapter was left with a Windows assigned 169.x.x.x address with unidentified network, hence no internet.

Suggestions? Client has a paid subscription, renewed, June 2016.

Remove avast using avastclear.
Install the latest avast version.

Clean Install of Avast:
https://goo.gl/4Ptzkf