I'm not sure why you're getting that error. Are your ports forwarded for the specific servers?
What commands are you running at startup in steam?
Have you tried disabling steam's in-game community to see if it's a bug with that?
Can you check for errors in C:\Users\%USER%\AppData\Local\Arma 3\%FILENAME%.rpt?
Check out HD Tune Pro, sounds like you could have something wrong with your hard drive. If it's software related, it could be that you need to disable HDD sleeping. The easiest way to do this is to set your battery mode to High Performance if on a laptop.
Edit: You could have bad sectors and need a new HDD, just realized your read/write speed are both under 2MB at 100%.. which is absolutely horrible