Getting check your internet connection error whenever in agent mode

Whenever I use agent mode and add context as any file, it is always showing the following error -
“Connection failed. If the problem persists please check your internet connection or VPN”

Was working fine, but I got a recent update and post that it has been like this. Tried everthing from forums but not resolved still. Please help me get this sorted out.

My current version is -
Version: 0.48.7 (Universal)
VSCode Version: 1.96.2
Commit: 1d623c4cc1d3bb6e0fe4f1d5434b47b958b05870
Date: 2025-04-02T04:51:59.792Z
Electron: 34.3.4
Chromium: 132.0.6834.210
Node.js: 20.18.3
V8: 13.2.152.41-electron.0
OS: Darwin arm64 24.3.0

Hey, which model is this occurring with? Or is it not related to a specific model?

cc @danperks

I mostly used claude sonnet 3.7 or 3.5 and this do give an error. Even tried with setting the model selection as Auto, but that too didn’t help

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