Was the network down? Can you actually 'reach' the SQL Server from your computer (try a PING test: PING <ipaddress> where the <ipaddress> is the address of the SQL Server).
Is SQL Server up and working? Can you go to the actual machine, login and run a query without problems?
Are you on a WinXP client? If so, did you install Service Pack 2? If so, did you turn off the internal firewall or adjust the ports to Allow TCP Port 1433 (default for SQL Server - automatically blocked with SP2)
If the Client computer is WinXP with SP2 that's the only time you need to check the computer's firewall.
The IP is a problem. 127.0.0.1 is the loopback default. That's not good. Have the sysadmin check it out and get it set to the proper IP address.
It's looking like it's the IP Address problem. Someone may have set it up with an incorrect IP address. Start there. I don't know how to change it, but it shouldn't be 127.0.0.1.
it was a 169. ip and then bumped to a 127.
I think the drivers for the nic need to be reinstalled, i don't know how to set it to the proper ip address, anyone?
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