So after some manic hunting around it seems the fix is to completely uninstall PeerGuardian for OSX. I had to re-download the PeerGuardian installer dmg to get the uninstaller. I ran that twice (to be sure) and then re-launched the Steam app. Immediately could log in without issues...
Hope this helps...
I remember this happening to me years ago on windows too. PG must block Steam servers. Makes sense...
Cheers to you, my good man! This solved my problem. I had SHUT DOWN peerguardian, opened my firewall, and opened about every single "sharing" option AND put my MBP in the DMZ, but still could not connect. Using PG's Uninstaller routine twice did the trick! THANK YOU.