diff --git a/packages/amazonq/test/e2e/lsp/lspInstallerUtil.ts b/packages/amazonq/test/e2e/lsp/lspInstallerUtil.ts
index 4c88cba491b..c7ca7a4ff9b 100644
--- a/packages/amazonq/test/e2e/lsp/lspInstallerUtil.ts
+++ b/packages/amazonq/test/e2e/lsp/lspInstallerUtil.ts
@@ -14,6 +14,7 @@ import {
     ManifestResolver,
     request,
     TargetContent,
+    ToolkitError,
 } from 'aws-core-vscode/shared'
 import * as semver from 'semver'
 import { assertTelemetry } from 'aws-core-vscode/test'
@@ -201,12 +202,6 @@ export function createLspInstallerTests({
                         id: lspConfig.id,
                         manifestLocation: 'remote',
                         languageServerSetupStage: 'getManifest',
-                        result: 'Failed',
-                    },
-                    {
-                        id: lspConfig.id,
-                        manifestLocation: 'cache',
-                        languageServerSetupStage: 'getManifest',
                         result: 'Succeeded',
                     },
                     {
@@ -282,6 +277,34 @@ export function createLspInstallerTests({
                 const download = await createInstaller(lspConfig).resolve()
                 assert.ok(download.assetDirectory.endsWith('-rc.0'))
             })
+
+            it('throws on firewall error', async () => {
+                // Stub the manifest resolver to return a valid manifest
+                sandbox.stub(ManifestResolver.prototype, 'resolve').resolves({
+                    manifestSchemaVersion: '0.0.0',
+                    artifactId: 'foo',
+                    artifactDescription: 'foo',
+                    isManifestDeprecated: false,
+                    versions: [createVersion('1.0.0', targetContents)],
+                })
+
+                // Fail all HTTP requests for the language server
+                sandbox.stub(request, 'fetch').returns({
+                    response: Promise.resolve({
+                        ok: false,
+                    }),
+                } as any)
+
+                // This should now throw a NetworkConnectivityError
+                await assert.rejects(
+                    async () => await installer.resolve(),
+                    (err: ToolkitError) => {
+                        assert.strictEqual(err.code, 'NetworkConnectivityError')
+                        assert.ok(err.message.includes('Unable to download dependencies'))
+                        return true
+                    }
+                )
+            })
         })
     })
 }
diff --git a/packages/core/src/shared/lsp/baseLspInstaller.ts b/packages/core/src/shared/lsp/baseLspInstaller.ts
index 27e19df6b3a..0aeca1dfda4 100644
--- a/packages/core/src/shared/lsp/baseLspInstaller.ts
+++ b/packages/core/src/shared/lsp/baseLspInstaller.ts
@@ -45,6 +45,7 @@ export abstract class BaseLspInstaller<T extends ResourcePaths = ResourcePaths,
             new Range(supportedVersions, {
                 includePrerelease: true,
             }),
+            manifestUrl,
             this.downloadMessageOverride
         ).resolve()
 
diff --git a/packages/core/src/shared/lsp/lspResolver.ts b/packages/core/src/shared/lsp/lspResolver.ts
index 04527d67246..e12cac74c40 100644
--- a/packages/core/src/shared/lsp/lspResolver.ts
+++ b/packages/core/src/shared/lsp/lspResolver.ts
@@ -29,6 +29,7 @@ export class LanguageServerResolver {
         private readonly manifest: Manifest,
         private readonly lsName: string,
         private readonly versionRange: semver.Range,
+        private readonly manifestUrl: string,
         /**
          * Custom message to show user when downloading, if undefined it will use the default.
          */
@@ -90,7 +91,22 @@ export class LanguageServerResolver {
 
     /** Finds an older, cached version of the LSP server bundle. */
     private async getFallbackServer(latestVersion: LspVersion): Promise<LspResult> {
-        const fallbackDirectory = await this.getFallbackDir(latestVersion.serverVersion)
+        const cachedVersions = await this.getCachedVersions()
+        if (cachedVersions.length === 0) {
+            /**
+             * at this point the latest version doesn't exist locally, lsp download (with retries) failed, and there are no cached fallback versions.
+             * This _probably_ only happens when the user hit a firewall/proxy issue, since otherwise they would probably have at least
+             * one other language server locally
+             */
+            throw new ToolkitError(
+                `Unable to download dependencies from ${this.manifestUrl}. Check your network connectivity or firewall configuration and then try again.`,
+                {
+                    code: 'NetworkConnectivityError',
+                }
+            )
+        }
+
+        const fallbackDirectory = await this.getFallbackDir(latestVersion.serverVersion, cachedVersions)
         if (!fallbackDirectory) {
             throw new ToolkitError('Unable to find a compatible version of the Language Server', {
                 code: 'IncompatibleVersion',
@@ -142,6 +158,7 @@ export class LanguageServerResolver {
                     assetDirectory: cacheDirectory,
                 }
             } else {
+                await this.cleanupVersion(latestVersion.serverVersion)
                 throw new ToolkitError('Failed to download server from remote', { code: 'RemoteDownloadFailed' })
             }
         } finally {
@@ -149,6 +166,14 @@ export class LanguageServerResolver {
         }
     }
 
+    private async cleanupVersion(version: string) {
+        // clean up the X.X.X download directory since the download failed
+        const downloadDirectory = this.getDownloadDirectory(version)
+        if (await fs.existsDir(downloadDirectory)) {
+            await fs.delete(downloadDirectory)
+        }
+    }
+
     /** Gets the current local ("cached") LSP server bundle. */
     private async getLocalServer(
         cacheDirectory: string,
@@ -178,16 +203,9 @@ export class LanguageServerResolver {
     /**
      * Returns the path to the most compatible cached LSP version that can serve as a fallback
      **/
-    private async getFallbackDir(version: string) {
+    private async getFallbackDir(version: string, cachedVersions: string[]) {
         const compatibleLspVersions = this.compatibleManifestLspVersion()
 
-        // determine all folders containing lsp versions in the fallback parent folder
-        const cachedVersions = (await fs.readdir(this.defaultDownloadFolder()))
-            .filter(([_, filetype]) => filetype === FileType.Directory)
-            .map(([pathName, _]) => semver.parse(pathName))
-            .filter((ver): ver is semver.SemVer => ver !== null)
-            .map((x) => x.version)
-
         const expectedVersion = semver.parse(version)
         if (!expectedVersion) {
             return undefined
@@ -203,6 +221,15 @@ export class LanguageServerResolver {
         return fallbackDir.length > 0 ? fallbackDir[0] : undefined
     }
 
+    private async getCachedVersions() {
+        // determine all folders containing lsp versions in the parent folder
+        return (await fs.readdir(this.defaultDownloadFolder()))
+            .filter(([_, filetype]) => filetype === FileType.Directory)
+            .map(([pathName, _]) => semver.parse(pathName))
+            .filter((ver): ver is semver.SemVer => ver !== null)
+            .map((x) => x.version)
+    }
+
     /**
      * Validate the local cache directory of the given lsp version (matches expected hash)
      * If valid return cache directory, else return undefined
diff --git a/packages/core/src/shared/lsp/manifestResolver.ts b/packages/core/src/shared/lsp/manifestResolver.ts
index 60cc466a835..6dd0a793178 100644
--- a/packages/core/src/shared/lsp/manifestResolver.ts
+++ b/packages/core/src/shared/lsp/manifestResolver.ts
@@ -69,7 +69,6 @@ export class ManifestResolver {
 
             const localManifest = await this.getLocalManifest(true).catch(() => undefined)
             if (localManifest) {
-                localManifest.location = 'remote'
                 return localManifest
             } else {
                 // Will emit a `languageServer_setup` result=failed metric...