Workaround worked for me. Here is what is posted on Airkast website:
NOTE to HTC EVO and Droid users on Android 2.2: There appears to be a firmware issue causing problems with RTSP streaming on this OS release for the above phones (the technically inclined can get more details here and here). This seems to be a problem affecting many streaming media apps, and must ultimately be fixed by the manufacturers/carriers. We are working to devise a way for the app to get around this limitation. However, in the meantime, there appears to be a workaround:
* Exit the app if you haven't already.
* Turn on the WiFi antenna on your handset (you don't actually need to be connected to a router or hotspot)
* Restart the app. At this point, the app will connect by WiFi if a connection is available nearby. If not, it will connect through your 3G/4G connection.
* Contact us at support@airkast.com if you have any problems or questions about this.
Note: I turned WiFi off after the app started working and app continued to work.