Failed to establish connection to 127.0.0.1

127.0.0.1 is a special IP address called the localhost address.
It's used to address services localised on your own pc. My first guess would be that your firewall is somehow blocking the connection attempts.

Either this or the Postgresql service is not running at all.
Please see our FAQ:
http://hm2faq.holdemmanager.com/questions/1001/Can+not+Connect+%7B47%7D+Failed+to+Start+PostgreSQL+
http://hm2faq.holdemmanager.com/questions/1011/Software+Security+Problems+%28Firewall%29

Sometimes (but I think in quite rare occasions) you need to edit system file named "hosts".

It is located in windows\system32\drivers\etc folder.

file should have line "127.0.0.1 localhost"
If not, one should be added.

You should be careful when editing files in system folders. If you don't have any ideas what you're doing, you should ask someone to do it for you who knows what to do.

This fix is only when everything else fails and such line does not exist in the hosts file.