FC5 127.0.0.1 refuses connection

[Geoffrey Leach <geoff direcway com>]

New update of FC5. Connection to internet (via eth0 and satellite) OK.
However ...

#sendmail -v root
test
.
root... Connecting to [127.0.0.1] via relay...
root... Deferred: Connection refused by [127.0.0.1]

telnet, fetchmail, binmail (of course) have same problem. Can ping  
127.0.0.1

Presumably related to update.

Any suggestions?