Can't send/recv email on IE5.5/Win98SE

Per Avast install instructions, I changed SMTP and POP3 settings to “127.0.0.1” to alllow filtering through Avast mail agent but am now unable to send or receive mail in Outlook Express, IE5.5, Win98SE. Recieve ERROR MSG - “The connection to the server has failed. Account: ‘AT&T Worldnet E-Mail’, Server: ‘127.0.1.1’, Protocol: SMTP, Port: 25, Secure(SSL): No, Socket Error: 10061, Error Number: 0x800CCC0E”
Uninstalled Avast, rebooted and reinstalled, to no avail. The only way I can send and receive mail is to change settings back to their original, which means nothing is being filtered through Avast. How do I correct? Many thanks.

Do you use a firewall? Which one?
Does ashMaiSv.exe is allowed to connect?
I think it’s better if you set your email to NOT use avast, close your email program, then run the Mail Protection Wizard to configure it.