Not able to connect to any server using Telnet

Edit: Of course, it's never that simple. As you've observed, Microsoft's telnet doesn't respond to ^] while waiting for a connection.

If you don't want to wait around, you only have two options:

• Kill the telnet process (from another command shell or the task manager), or

• Use another telnet client. PuTTY is a good choice, since it will launch as a separate window; even if you get the port wrong and the PuTTY window freezes, your command shell will be available to launch another instance with the correct port number.

Use the escape character (defaults to Ctrl+]). This brings up a telnet prompt at which you can close or quit the connection.

> telnet

Welcome to Microsoft Telnet Client

Escape Character is 'CTRL+]'

Microsoft Telnet> 

You can change this to nearly anything you like on your commandline by using the -e flag:

C:\>telnet /?

telnet [-a][-e escape char][-f log file][-l user][-t term][host [port]]
[...]
 -e      Escape character to enter telnet client prompt.
[...]

C:\>telnet -e '

Welcome to Microsoft Telnet Client

Escape Character is '''

Microsoft Telnet>

Have you tried disabling the auto-tuning diagnostic in Windows 7?

netsh int tcp set global autotuninglevel=disabled

Microsoft Support KB article:

When the receive window autotuning feature is enabled, older routers, older firewalls, and older operating systems that are incompatible with the receive window autotuning feature may sometimes cause slow data transfer or a loss of connectivity.

The default auto-tuning level is "normal", and the possible settings for the above command are:

• disabled: uses a fixed value for the tcp receive window. Limits it to 64KB (limited at 65535).
• highlyrestricted: allows the receive window to grow beyond its default value, very conservatively
• restricted: somewhat restricted growth of the tcp receive window beyond its default value
• normal: default value, allows the receive window to grow to accommodate most conditions
• experimental: allows the receive window to grow to accommodate extreme scenarios (not recommended, it can degrade performance in common scenarios, only intended for research purposes. It enables RWIN values of over 16 MB)