System.Net.WebClient fails weirdly

I am trying to download some data from the reporting services instance on our TFS server.
Given that the code should run on a computer that is not domain-joined, I figured that I would set the credentials myself. No luck, got a HTTP 401 Unauthorized back. Ok, so I hooked up Fiddler to see what was happening.

But that's when I got Heisenberged - the call now went through without a hitch. So the authentication goes through with Fiddler connected, but fails without it. Is the Webclient broken or am I missing something profound here?

private void ThisWorksWhenDomainJoined()
    {
        WebClient wc = new WebClient();
        wc.Credentials = CredentialCache.DefaultNetworkCredentials;
        wc.DownloadString("http://teamfoundationserver/reports/........");  //Works
    }

    private void ThisDoesntWork()
    {
        WebClient wc = new WebClient();
        wc.Credentials = new NetworkCredential("username", "password", "domain");
        wc.DownloadString("http://teamfoundationserver/reports/........");  //blows up wih HTTP 401
    }