I'm no help. But I have the same LAN loopback problem.
First, some details:
I have a wireless router connecting my desktop and my laptop. I am running Mangos 2.0.8, while my client is the new 2.0.10.. (Would that cause a loopback issue?)
I REALLY don't want to spend another three hours downloading the 2.0.10 server, but I will if you have a logical explanation as to why the differing client/server versions would... cause a loopback issue specifically.
Well, on to the server side. I have EVERYTHING set to 127.0.0.1. Don't worry about that. Any posts like "Have you tride 127,0,0,1??/" will be cheerily disregarded.

....I've tried localhost, 192.168.2.2 (my PC IP), 192.168.2.1 (my router's IP)... None make any difference.
Now, in realmd_bc/realmlist in my SQL database, the following entry exists:
id: 1
name: servername
address: 192.168.2.2 (at the moment, that is what I have in there... I've tried 127.0.0.1 obviously)
port: 8085 (at least I know this is right...)
icon: 0 (blah blah blah...)
color: 0
timezone: 0
dbinfo: 192.168.2.2;3306;root;<my password>;realmd_bc
NOTE THAT LAST BIT.. please. (sorry about the caps) I *know* that it's probably not correct. In fact, when the server was first started, it had some junk like "127.0.0.1;3306;root;thomas;bcemu"
Of course "thomas" isn't my password, so I figured that I'd have to change it to my actual database root password. ALSO the "bcemu" part made no sense to me, so I changed it. Was I wrong to do so?
Meh, I'm really new to all of this, but I managed to get this far!
Misc. Notes: I'm using WAMP instead of MySQL. I can't install MySQL on my desktop no matter WHAT I try. (And if I ever give up on installing something, it's definitely beyond all hope.)
So... WAMP seems to work. Otherwise, I wouldn't get the following messages in my realmd.exe program:
"Accepting connection from 192.168.2.3:3306"
"User 'test' sucessfuly authenticated"
...AND that repeats each time I go through the loopback. -_- So, my database seems to work, but something IN the database isn't working,.. right?
Sorry for the long post, I hope you can make sense of it, and can help me with this problem shared by so many..