Client and Server on same machine

I have installed Lotus Notes and Client on a stand alone m/c. I have set up TCP/IP as protocol. The client IP is 127.0.0.1 and server IP is 192.168.3.1. These are defined in Hosts file and the Network has been configured properly.I have installed the ND6 Server ( set up the server and is running) and i plan to install the Administration Client on the same machine. When i ask for the client to connect to the server over the LAN, there is an error informing that “either the server is not found or the server is not running”.However, the server is active and i check it with domino console scripts sh ser and sh users. Pls help solving this classic problem.