vncserver unable to connect to host: Connection refused (111) 7.10

[primorec]

Hi All,

short description:
I am not able to connect to vncserver running on ubuntu 7.10.
I've tried to connect locally and remotely to no avail

starting server:
[igor at thinkpad-T40 ~]$ vncserver

New 'X' desktop is thinkpad-T40:1

Starting applications specified in /etc/X11/Xsession
Log file is /home/igor/.vnc/thinkpad-T40:1.log

starting viewer on the same machine:
--------------------------------------------------
[igor at thinkpad-T40 ~]$ vncviewer 10.188.26.175:1

VNC Viewer Free Edition 4.1.1 for X - built Sep 10 2007 17:17:04
Copyright (C) 2002-2005 RealVNC Ltd.
See http://www.realvnc.com for information on VNC.

Tue May  6 14:30:30 2008
 main:        unable to connect to host: Connection refused (111)

starting viewer on the remote machine:
------------------------------------------------------
502 palace:~ > vncviewer 10.188.26.175:1
vncviewer: ConnectToTcpAddr: connect: Connection refused
Unable to connect to VNC server


 I can start viewer on the offending machine and work with any remote host.
So, the vncviewer on the offending machine  (10.188.26.175) is working.

So, the  problem is:
vncviewer can NOT conenct to the vnc server on the same machine (aka
offending machine)
vncviewer on any other host can not connect to the vncserver on the
offending machine
but it connects to any other server on any other host.

Any hint, advice, RTFM pointer, solution is more than welcome

Please help

Igor