Radar Mary -
You were having the same problem I was downloading the encoder. My guess is you manually downloaded the files and you're pointing to them as an "external" encoder. That looks different than if you installed them with the built-in downloader. Right?
I spent time today working with a dedicated MJ team member trying to figure out why I had a download issue. In the end, the problem melted away - it clearly was related to settings on the proxy server on my end, but when it resolved, it was impossible to be sure what had caused the problem in the first place. (I changed settings on the proxy server and the problem ended, but then I couldn't duplicate it by going back to the prior settings. Frustrating!) In any case, I'm now downloading encoders and skins with no problem.
If your Internet connection is through a proxy server (in your browser under Internet options / Connection / LAN settings), the problem may have nothing to do with your computer; the solution might be a setting on the proxy server.
In the meantime, maybe I'm paraphrasing your question to the MJ folks: if an encoder .zip file is manually downloaded, is there a manual way to install it into MJ so it appears as naturally as if it had been downloaded within the program?
Good luck! And don't give up on MJ - it's too good to let this get in the way.