ifconfig refuses to configure loopback address

[Mike <michaelh@hawaii.edu>]

I'm trying to install Debian 1.1 and can't seem to get the loopback
device configured. At boot up the error:

    SCIOADDRT: Invalid argument

appears when the /etc/init.d/network script runs. The offending line
in this script is:

    route add -net 127.0.0.0

ifconfig reports (output below) that the loopback interface does not
have the inet addr that I expect it to have (nor the one that it had
under Debian 0.93R6, BTW).

Any help or pointers appreciated. Mike.

Here's the output from ifconfig:

lo       Link encap:Local Loopback  
         inet addr:255.255.255.255  Bcast:127.255.255.255  Mask:255.0.0.0
[which used to read:
         inet addr:127.0.0.1 Bcast:127.255.255.255  Mask:255.0.0.0
]
         UP BROADCAST LOOPBACK RUNNING  MTU:3584  Metric:1
         RX packets:0 errors:0 dropped:0 overruns:0
         TX packets:0 errors:0 dropped:0 overruns:0

eth0     Link encap:10Mbps Ethernet  HWaddr 00:A0:24:0D:08:7E
         inet addr:xxx.yyy.zzz.164  Bcast:xxx.yyy.zzz.191  Mask:255.255.255.192
         UP BROADCAST RUNNING MULTICAST  MTU:1500  Metric:1
         RX packets:1074 errors:0 dropped:0 overruns:0
         TX packets:135 errors:0 dropped:0 overruns:0
         Interrupt:5 Base address:0x300 

Here's the current /etc/init.d/network script:
#!	/bin/sh
ifconfig lo 127.0.0.1
route add -net 127.0.0.0
IPADDR=xxx.yyy.zzz.164
NETMASK=255.255.255.192
NETWORK=xxx.yyy.zzz.128
BROADCAST=xxx.yyy.zzz.191
GATEWAY=xxx.yyy.zzz.129
ifconfig eth0 ${IPADDR} netmask ${NETMASK} broadcast ${BROADCAST}
route add -net ${NETWORK}
route add default gw ${GATEWAY} metric 1

And, FWIW, here's the 0.93R6 /etc/init.d/network:
#! /bin/sh
# network: establish the network connection.
# $Id: network,v 1.1 1995/02/19 20:29:29 imurdock Exp $

# Configure the loopback device.
ifconfig lo 127.0.0.1
route add 127.0.0.1

# Configure the ethernet device or start SLIP/PPP below.
IPADDR="xxx.yyy.zzz.164"	# Your IP address.
NETMASK="255.255.255.192"	# Your netmask.
NETWORK="xxx.yyy.zzz.128"	# Your network address.
BROADCAST="xxx.yyy.zzz.191"	# Your broadcast address (blank if none).
GATEWAY="xxx.yyy.zzz.129"	# Your gateway address.

/sbin/ifconfig eth0 ${IPADDR} netmask ${NETMASK} broadcast ${BROADCAST}

/sbin/route add -net ${NETWORK}
/sbin/route add default gw ${GATEWAY} metric 1