msfupdate -u -p httpIP address):8080

When authenication is on for the proxy I get this:
[*] Calculating local file checksums, please wait...
[*] Proxy: HTTP/1.1 407 Proxy Authentication Required ( The ISA Server requires
authorization to fulfill the request. Access to the Web Proxy service is denied.
'Access to the Web Proxy service is denied.' <-- Is the promblem.

You can use update metasploit through TOR really easy to do actually. Heres a pic