I have the same problem with a friend.
We were using the same mods, suddenly the game started to be out of sync, than we werent able to connect to each other :/

you click the tab "guides" and find tons of guides about that topic

Most of the times it works to make in/out firewall rules in win10 and put them to allow all.

If you still got problems then you can set the UDPORT setting to a specific port or range in the local_settings.txt located in your documents/my games/runic games/torchlight 2 folder.

Those things will not make the firewall error in red coloured text disappear but you will be able to connect to other players.

If you still can not you might have a router that needs some port forwarding. More details to that you find in the guides section.

If you are playing in LAN you have to make sure not to use the same UDP-Port, else you can not connect.

Also if you use a 3rd party firewall you might have to make a rule to allow the svchost.exe to use UDP within a range of ports or just on one port. It seems that UDP access just works via that service. At least I could connect to games that I couldnt connect to before setting up that rule.

thank you for reply

"FIREWALL ISSUES DETECTED" SOLUTION
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go to "C:\Users\<User>\Documents\My Games\runic games\torchlight 2"
right-click, edit: "local_settings"
ctrl + f: "UDPORT"
change "0" to "4171"
ctrl + s
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All your friends will need to do this. Enjoy