Ok. this is goin to be wild goose chase.
1. First wats the OS?
2. On NT, verify LOCAL does not exist in registry.
   System Key: [[HKEY_LOCAL_MACHINESoftwareOracleHome(x)]] 
   Value Name: LOCAL

3. Try to replace the hostname with IP and try again.
4. First of all, try to restart the listner is server.
5. If nothing works,
   enable tracing.
        edit the sqlnet.ora file 
        add the parameter TRACE_LEVEL_CLIENT=16 
        try to connect again (sqlplus) to generate error
        open the trace (cli.trc??)
        look for something like
             "nttbnd2addr:  *** hostname lookup failure! ***" 
        a. Verify this hostname is spelled correctly 
        b. Verify this hostname actually exists by executing the OS command 
   "nslookup [[hostname]]" where [[hostname]] is the value of the HOST parameter 
   defined for the Net service name being used for the connection. 
       c. Add the hostname, returned by the trace, to the local hosts file and assign it 
   the correct IP address (NOTE: this hostname may be a secondary network card 
   on the server or in some cases you need to add the 'Hostname.DomainName' 
   of the server in the etc/Hosts file(/etc/hosts is in UNIX, i dunno about WINDOWS) at the client side). 
       d. Using the IP address of the server for the HOST value in the tnsnames.ora 
   file may also be a solution.  This avoids Host to IP resolution.

in cli.trc, if you find "NSPTRD"  then this is to deal with dispatchers.