apache problem OSX 10.3.2

I've just updated Mac 10.3.1 to 10.3.2 via software update, restarted etc etc and now when I try to access the site I'm developing locally I get a Server 500:

[code=CANT_CONNECT_LOOPBACK] Cannot connect due to potential loopback problems

It happened a few weeks ago in IE5, but not in Safari and if I put localhost instead of 127.0.0.1 in IE it worked fine. I've tried restarting Apache and I've tried all possible host names, anyone ever come accross this before and know what I should look in to fix ??? There's nothing in my error logs and I haven't changed anything in my httpd.conf and wouldn't imagine the update has.

the weird thing is though, if I try 127 in IE I get the same error, if I try localhost everything works fine. Both in safari fail ?? ? I don't won't to use IE for testing my code, I'm planning to use CSS1/2 and standards so it won't display properly!!! Is this a safari problem ????

I've turned off my firewall and that didn't help either and I've tried logging in as other users but that didn't help either.

Any ideas ??

Thanks,

Jon