Sorry, I didn't read the log file good enough... The port 8888 is of your application catalog and not of your WSUS.
I also just read your initial post.. First get rid of the GPO pointing to your ConfigMgr, it will only cause problems. By enabling the ConfigMgr client for software update (via the client settings) the ConfigMgr client will set a local policy that will point to the Software Update Point. Make sure this is in place an that the updates are deployed to the clients (via a Software Update Group).