This problem can be resolved only in custom wordpress installations i.e. you have your own domain on which you have installed wordpress (downloaded from http://www.wordpress.org/).
After login through FTP (Example FTP client is filezilla) to your web hosting provider, locate the folder where you have installed wordpress. In my case, I have installed it in a folder called "blog".
Locate the folder "wp-admin". Inside wp-admin, select a folder called "import". Open the "import" folder. There's a file called "blogger.php". Download the file to your computer. Open the file in any of the popular text editors and go to line number 87. It looks like the first screenshot.
[Click the image for a bigger screenshot]
Line number 87 is highlighted in blue. Change "www2.blogger.com" to "www.blogger.com" (Refer to screenshot below). Save the file and upload it to the same folder from where you downloaded it.
[Click the image for a bigger screenshot]
Have fun! :-)
