I'm curious if it has anything to do with the update server you're pointing to. It's possible that particular mirror is having an issue which reflects oddly on update manager, since update manager is basically a portal to that node.
I actually always change my update source, because 95% of users who install Ubuntu are pointing to the main server. Each time a new edition of Ubuntu is released, people flock to install it, which bogs down servers like no other which makes updating a royal headache. If you change your update source I'm curious if you'll have any different results.
If you go to System - Administration - Software Sources, it'll come up with a window with different features and settings. Halfway down you'll see where your update source is, which is more than likely listed as Download From: Server for United States. If you click on the server (it's a drop down list) and go to other, all of the available update servers will be listed there. If you hit select best server, it'll find the fastest one to update from and you can select it as your main. After that, go through the process with update manager again to see if you get a different result.
I'm not saying this *is* the issue, however I have heard on maybe two occasions in the last five years of where a particular update mirror was down, so it was just the first thing to come to mind.
By the way, are you on 10.04 or 10.10?
Secondly, when you open update manager, are you hitting "check" or are you just opening update manager to see what's there? Opening update manager simply opens it, and it will only list whatever updates it sees as "new" from when it was scheduled to last check. If you hit check, it's a direct "show me now, ******" type of function.