Since Java 7 is currently at update 45, it might be worthwhile to try the latest update first in case the Java issue was a regression bug in the Java runtime. Others have reported taht it works just fine with Java 6.
The internal notes of the bug report that the JVM is requestung JAR files and the IIS server is rejecting them with a 401 unauthorized error. A wireshark trace might illustrate the issue.
There is no indication that there is an issue with the Cisco product at this point. The bug is "Postponed" awaiting feedback from Oracle.
Some cases suggest this may be a variant of CSCug37698,
It may be worth opening a TAC case to debug.