I've noticed that some Google services are blocking requests from App Engine servers, resulting in a urlfetch DownloadError. An example would be a feedproxy.google.com url (http://feedproxy.google.com/~r/blabbermouth/~3/cAk78LX4gJE/news.aspx, for example).
This occurs on all the apps I've tried it on, including app IDs I've never used for any kind of url fetching before. This behavior also doesn't occur on the local SDK. This leads me to believe that this is a result of using any GAE IP address when making the request.
The weird thing is that it results in the throwing of a DownloadError, instead of an error status_code in the successfully retrieved response. Using urlfetch or httplib locally works just fine, so this DownloadError I don't yet grok, or it's just a bug, in which case I'll file a ticket.