Hi,
Yes that sounds reasonable, the DNS in the router isn't resolving the IP address.
Try a tracert to localhost and 127.0.0.1 and see what the differences are.

>Looking for this problem over in the FoxPro forum, in 2004, I came across a lengthy thread on it: Thread ID: 963693
> Message ID: 964181
> Title: Re: Localhost won't work running under SP2
>
>This message 964181 seems to be the "concluding" answer to the problem - the router when running somehow stuffs up the localhost address. The answers seem to be to either switch the router off, or get a static IP address.