Hello. Now I have the same problem. I have tried plenty of different anti-virus software. And yet, unsuccessful. I can tell you, that NOD32, McAfee, Norton, Kaspersky won't find anything. AVG is good, but when you got the infection inside, it is useless. You won't be able to update any of them, not even Malwarebytes or access their websites (e.g. avg.com, symantec.com and so on...). And the "hosts" file has nothing to do with it!
But I have found a solution if you want to be able to update your anti-virus. Is has something to do with "svchost.exe" which can be seen in the task manager (ctrl+alt+dele > Processes). First of all, make a BAT file on your desktop (just make a TXT file and rename it's extension to .BAT). Open it with your right mouse and click edit. Put the following code:
and save the file.
Now access the task manager and go to Processes. Start killing all the "svchost.exe" until you have none of them running. This will make a message with a shutdown appear on your screen. Run the BAT file, this will cancel the shutdown. Now when you kill all the "svchost.exe", you will be able to update your anti-virus and go online to avg.com or other.