SYN Timeout: Need a brief explanation

That's indicating that someone asked to start a TCP connection, but never followed through.  Port scanners will commonly produce this symptom, as they'll send a lot of TCP SYN ("synchronize [sequence numbers]") packets, then never follow up on the response.

It's the TCP equivalent of getting called by a telemarketer, answering the phone, then getting nothing but dead silence.  Eventually you get frustrated ("time out") and hang up.

Where are we at in the process of the handshake?  Did I send the SYN, but not get a response back?  What response am I waiting for that I do not recieve and eventuallty time-out?

You got a SYN, sent back a SYN/ACK, but then there was no further communication.

If you get a LOT of those from the same source, that's called a SYN Flood attack.

Pretty pictures here:
http://en.wikipedia.org/wiki/SYN_flood

OK... so the time-out is caused by not receiving an ACK.  Just to be clear... This could be caused by one of the following:
1) The SYNACK (that I sent) was never recieved.  
2) The SYNACK was received, but ignored and no ACK was sent
3) The SYNACK was recieved and an ACK was sent back, but the packet was lost in transit and sever arrived.

Correct?

Oh-- one last note:  If a properly functioning host had decided not to follow through on the connection-open SYN request, it would have responded with a RST packet when it received your SYN/ACK packet.  That would not have produced the timeout message.