Normally I would agree with you. But the only this that has changed from a working enviorment has been

I removed the eq2 schema, and remade it
Re-downloaded all the EQ2emu stuff from the svn

Likewise, I can assure you that something changed locally, be it by you, by someone in your household, or some other app/thing that got installed or setup since the last time you ran eq2emu that is now preventing only internal connections from working.

I assure you, there is not one thing in the DB schema or emulator code that in any way blocks only local connections. It's not the code, it's your setup... and aside from these helpful hints on where to look, no one here can fix this problem for you.

But I do wish you luck sorting it out

Ok, Thanks for doing what you can. I may just reload my OS on the client machine, and try it.

On a side-note, you should download and try VMWare Workstation Virtualization is so 21st century!