Why does this TCP code hang when trying to read?

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C#

TCP/IP

I'm trying to be the "enabler" of a TCP conversation between a handheld device and server app running on a PC by adding code to the handheld (C#, WindowsCE, CompactFramework). I ad[a,o]pted an example I found online to this:

TcpClient client = new TcpClient("PPP_PEER", 7727);
try
{
    try
    {
        bool keepListening = true;
        Stream s = client.GetStream();
        StreamReader sr = new StreamReader(s);
        StreamWriter sw = new StreamWriter(s) { AutoFlush = true };
        while (keepListening)
        {
            sw.WriteLine("PING|");
            int peekInt = sr.Peek()
            ExceptionLoggingService.Instance.WriteLog(String.Format("Here is what was peeked at: {0}", peekInt));
            String response = sr.ReadLine();
            ExceptionLoggingService.Instance.WriteLog(String.Format("Here is the response: {0}", response));
            if (!(response.Contains("DISCONNECT"))) //XFERCOMPLETE ?
            {
                keepListening = false;
            }
        }
        s.Close();
    }
    finally
    {
        client.Close();
    }
}
catch (Exception ex)
{
    String msgInnerExAndStackTrace = String.Format(
        "{0}; Inner Ex: {1}; Stack Trace: {2}", ex.Message, ex.InnerException,  
            ex.StackTrace);
    ExceptionLoggingService.Instance.WriteLog(String.Format("From FileXferLegacy.SendDataContentsAsXML(): {0}", msgInnerExAndStackTrace));
}

The server does receive the "PING|" message and, in fact, it responds to it, according to its own display. It claims that it sends back "Responding to at 127.0.0.1:59964*: PING|ACKNOWLEDGED|--12/17/2014--9:42:15 AM"

But the code above, running on the handheld, hangs on the "String response = sr.ReadLine();" line.

Note: What is written to the log file is:

Here is what was peeked at: 80

(Since it hangs on the readline, the subsequent log file entry is not made).

I'm guessing the "80" here is a port number, but what this means as to how I should proceed, I have no clue.

A scream shot of the conversation that takes place with the legacy client and the existing server can be seen in Update 2 here: http://stackoverflow.com/questions/27513186/why-am-i-getting-an-endless-until-warmbooted-loop-with-this-code[^]

* port is assigned randomly, and differs each time it is run