Just did a quick google search and it seems there is a problem connecting to 'addresses in the loopback address range'...but it says addresses other than 127.0.0.1 may be a problem.
This article may or may not help then...http://support.microsoft.com/default.aspx?scid=kb;en-us;884020
Other than that check your firewall settings.
This article may or may not help then...http://support.microsoft.com/default.aspx?scid=kb;en-us;884020
Other than that check your firewall settings.