I had a user that was trying to access a FTP site. She was a new employee but was using the same link given to her by the old employee. testing htat link on my machine resulted in the following page popping up. So I knew that my Firewall was involved. This had worked in the past just fine. After checking the firewall logs on the server I could tell it looked fine. The Actual Error read:
Error Code: 502 Proxy Error. The login request was denied. The logon account might have been disabled or logon information might have changed. Log on again to verify that the information was typed correctly. If the problem continues, report the problem to the administrator of the Internet server you are requesting. (12015)
So I could see that it seemed that the firewall was coughing on the credentials. Everything worked after going to Internet Explorer >Internet Options>Connections>LAN Settings>Uncheck "Automatically detect settings." This wasn't really a solution I wanted.
I remembered after working around a little that in the past using Windows Explorer to browse to location for FTP would resolve the issue. After having her open Windows Explorer and putting the address in there than she was able to put in her credentials and access the site.
So the FMTG\ISA server didn't like how Internet Explorer was asking for credentials when the client was set to use it as a proxy. Not sure exactly but using Windows Explorer fixes the issue without having to make any changes to your setup.