Unable to connect to SQL server database

Hi, i recently installed studio and am trying to get it to connect to local SQL server db. When i add a new connection and click test, it just hangs.

note: i have verified the port number, i can telnet localhost 1433, connect to db from SSMS , verified that network parameters are set correctly, even tried connecting using localhost, 127.0.0.1, hostname, IP but to no avail.

Q: Why does the error refer to /etc/hosts (on a windows)?

Here's the exception I get in the log.

org.h2.jdbc.JdbcSQLException: Exception opening port "H2 TCP Server (tcp://<ip address>:62419)" (port may be in use), cause: "timeout; please check your network configuration, specially the file /etc/hosts" [90061-194]
    at org.h2.message.DbException.getJdbcSQLException(DbException.java:345)
    at org.h2.message.DbException.get(DbException.java:179)
    at org.h2.tools.Server.start(Server.java:498)
    at org.h2.engine.Database.startServer(Database.java:808)
    at org.h2.engine.Database.open(Database.java:664)
    at org.h2.engine.Database.openDatabase(Database.java:276)
    at org.h2.engine.Database.<init>(Database.java:270)
    at org.h2.engine.Engine.openSession(Engine.java:64)
    at org.h2.engine.Engine.openSession(Engine.java:176)
    at org.h2.engine.Engine.createSessionAndValidate(Engine.java:154)
    at org.h2.engine.Engine.createSession(Engine.java:137)
    at org.h2.engine.Engine.createSession(Engine.java:27)
    at org.h2.engine.SessionRemote.connectEmbeddedOrServer(SessionRemote.java:354)
    at org.h2.jdbc.JdbcConnection.<init>(JdbcConnection.java:116)
    at org.h2.jdbc.JdbcConnection.<init>(JdbcConnection.java:100)
    at org.h2.Driver.connect(Driver.java:69)
    at java.sql.DriverManager.getConnection(DriverManager.java:664)
    at java.sql.DriverManager.getConnection(DriverManager.java:270)
    at com.rapidminer.tools.usagestats.CtaDataSource.getConnection(CtaDataSource.java:101)
    at com.rapidminer.tools.usagestats.CtaDao.<init>(CtaDao.java:75)
    at com.rapidminer.tools.usagestats.CtaDao.<clinit>(CtaDao.java:45)
    at com.rapidminer.tools.usagestats.CallToActionScheduler.persistEvents(CallToActionScheduler.java:158)
    at com.rapidminer.tools.usagestats.CallToActionScheduler.access$100(CallToActionScheduler.java:48)
    at com.rapidminer.tools.usagestats.CallToActionScheduler$1.run(CallToActionScheduler.java:96)
    at java.util.concurrent.Executors$RunnableAdapter.call(Executors.java:511)
    at java.util.concurrent.FutureTask.runAndReset(FutureTask.java:308)
    at java.util.concurrent.ScheduledThreadPoolExecutor$ScheduledFutureTask.access$301(ScheduledThreadPoolExecutor.java:180)
    at java.util.concurrent.ScheduledThreadPoolExecutor$ScheduledFutureTask.run(ScheduledThreadPoolExecutor.java:294)
    at java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1142)
    at java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:617)
    at java.lang.Thread.run(Thread.java:745)