can't access localhost

When you run /sbin/ifconfig is the interface lo up? Are there any
messages in /var/log/syslog that might be relevant?

No, when I run ifconfig, it only gives details for eth1.
There is nothing much in /var/log/syslog

ping -c 2 localhost
ping -c 2 127.0.0.1

# ping -c 2 localhost
PING localhost (127.0.0.1) 56(84) bytes of data.

--- localhost ping statistics ---
2 packets transmitted, 0 received, 100% packet loss, time
# ping -c 2 127.0.0.1
PING 127.0.0.1 (127.0.0.1) 56(84) bytes of data.

--- 127.0.0.1 ping statistics ---
2 packets transmitted, 0 received, 100% packet loss, time 1010ms

What is the output of this command?

netstat -tunl

# netstat -tunl
Active Internet connections (only servers)
Proto Recv-Q Send-Q Local Address           Foreign Address         State
tcp        0      0 0.0.0.0:111             0.0.0.0:*               LISTEN
tcp        0      0 0.0.0.0:113             0.0.0.0:*               LISTEN
udp        0      0 0.0.0.0:32768           0.0.0.0:*
udp        0      0 0.0.0.0:68              0.0.0.0:*
udp        0      0 0.0.0.0:5353             0.0.0.0:*
udp        0      0 0.0.0.0:111             0.0.0.0:*
udp        0      0 0.0.0.0:631             0.0.0.0:*

What does this respond?

/sbin/route -n

# /sbin/route -n
Kernel IP routing table
Destination     Gateway         Genmask         Flags Metric Ref    Use Iface
169.254.1.0     0.0.0.0         255.255.255.0   U     0      0        0 eth1
169.254.0.0     0.0.0.0         255.255.0.0     U     1000   0        0 eth1
0.0.0.0         169.254.1.1     0.0.0.0          UG    0      0        0 eth1

Does your /etc/hosts properly set 'localhost' to 127.0.0.1 ?

# cat /etc/hosts
127.0.0.1 localhost mc
127.0.1.1 mc.home.m mc

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