On some systems, Java is trying to use some sort of broken ipv6 stack, so Launcher v4 uses a command line option to force ipv4. This may fix some people's connection errors.
You should be updated automatically. To check if you are running the latest launcher, your log file will say "Local launcher version:4". If it indicates 2 or 3, then right click 8BitMMO in steam -> files -> verify integrity of game cache, which should force an update.
If launching via Steam doesn't work, try the logger batch file.
Special thanks to Darx for being my test subject!