If so, have you tried connecting from another computer on the local network. If not, is there a way you can set one up temporarily? This will allow you to verify whether the problem is from the ISP or not.
This doesn't sound right for a standard firewall. That wouldn't allow anything in or out that they didn't want to get through. Hence if they were blocking port 23, you wouldn't get anything. It's not quite like a normal adaptive firewall, which watches for port scans and will block the offending IP address after so many ports have been scanned. There shouldn't be a lot of data going through a telnet connection, so I would doubt that you've hit an upload limit. Is the terminal type correct on the client end, so that there are no unexpected characters breaking the connection? Are there any limits configured in the software? Do those programs default to only accepting loopback (127.0.0.1) connections?
Many broadband ISPs will limit upload speeds more than download speeds. They may offer 1M download speeds, but only 128K upload speeds. This could be the reason your pages are served up so slow to your friends.