Wrapping the socket operations within an eval block will help fix both issues. First, if connection is refused, the error will be put into $@ for later processing if you desire. Second, the timeout effect I believe you're after can be achieved with a local alarm signal handler, and setting the number of seconds before the alarm is raised (this error will also be put into $@ if triggered)...

#!/usr/bin/perl
use strict;
use warnings;

use IO::Socket::INET;

eval {

    local $SIG{ALRM} = sub { die 'timeout'; };
    alarm 10;

    my $socket = IO::Socket::INET->new(
      PeerHost => $ARGV[0],
      PeerPort => 22,
      Proto    => 'tcp',
    );

    die "$!\n" unless $socket;

    $socket->print("\n");

    my $output = join '', $socket->getline();

    print $output;
};

# if eval set an error... handle it

if ($@){
    ... if $@ eq 'timeout';
    ... if $@ eq 'Connection refused';
}
[download]

-stevieb

ps. Note that in the IO::Socket::INET documentation, all of the parameters start with an upper-case letter (you mistyped 'Proto' and 'Timeout'). I don't know whether that's operationally important or not in this case, but I wanted to point it out. Not using an API according to the documentation can lead to incorrect results.