What other update sites did you include in your Eclipse installation?
I had a similar problem when upgrading from an older Mylyn and found out that it helps to disable other update sites. When installing new plugins or even updating old ones, Eclipse tends to communicate with all included update sites. I don’t know what exactly he is trying to do, but it helped me disable all sites except the ones I wanted to use.
Btw, Eclipse 3.5M6 - / . Eclipse 3.5, .