Did more testing. I created a Multiplayer game while Steam is selected as the server lists and even when I was in game I was still unable to connect to the internet. I switched it to Gamespy and hosted a game and everything seemed to work ok.

Sorry, 1.18 not 1.8.
For myself switching from Steam to Gamespy actually seems to fix the issue. My friend is having the exact same issue since the update though and switching makes no difference.