**** SOLUTION - WITHOUT ROOTING *****
I searched many forms to solve the "Unable to scan network" issue. All explained how to do it after rooting and I did not want to root my phone.
Yesterday, while playing with the phone and SDK, I could repair it by deleting "bcm_supp.conf" file. This is what I did:
1. Install the SDK -> Android SDK | Android Developers
(make sure the <SDK>/tools path is added to the windows path variable. My Computer -> Properties -> Advanced -> Environment Variables -> System variable -> add the SDK path at the end of Path variable )
2. On your phone, please enable (tick mark) "USB debugging" under "Settings" -> "Applications" -> "Development"
3. Connect your phone using USB to PC/Laptop. Close phone manager application if it comes up on the PC.
4. Run "ddms.bat" from <SDK>/tools directory. The DDMS application will come up and it should readily connect to your phone. (in the main screen, under Name, you should find the phone ID and SW ver. no.)
5. Go to menu Device -> File Explorer. New window will come up.
6. Here go to data -> wifi directory. You will see a file bcm_supp.conf.
7. Though it is not possible to read this file, you should be able to delete it. (at least I could delete it). You can delete the file by selecting it and then pressing red "-" on top left of the window.
8. Now close the DDMS and disconnect the USB. Enable WiFi and scan for networks. The bcm_supp.conf file will get created and you should be able to find the networks.
1. Do this on your own risk.
2. All your previous WiFi settings are gone as you delete the file.
3. If you don't know how to install SDK, just google, you will find many forms explaining.