Punkbuster denied that I found a simple solution.
I got a final response from pb:
Punkbuster:
"I doubt that is the issue as I personally use AVG products and PB with no issues at all."
My response:
"I disagree, the AVG link scanner was removed, thus correcting the issue.
I also deleted and manually reinstalled punkbuster. I have been to over 10 forums regarding this and all agreed that was the issue since there has been a history of AVG problems with ET users. In my case this use of the AVG link scanner was removed etc. I think pb should list what can work and cannot work with ET pb enabled, since punkbuster is always running on our computers.
I hope that you add do not install AVG link scanner to your computer as a means of helping fellow gamers like I did."
This proves that punkbuster is unwilling to listen even if a viable solution is found, which is just plain ignorant.