When running flash components that use localConnection within an HTML container, I get the following error in a popup box (flash player is the debug version):
Error
// add this line after the instanciation aof the receiver file
receiveSwf_lc.allowDomain("localhost");
// or whatever domain you like, use * as wildcard to allow any domain name
Changing the page's URL from http://127.0.0.1/ to http://localhost/ solved the problem.
also you might want to add a crossdomain.xml file, but here is the decent explaination: http://scottrockers.com/blog/resources/flash-information/workaround-solution-to-flash-error-2044-unhandled-securityerror-and-error-2048-security-sandbox-violation
You can add a hosts file entry and point it to 127.0.0.1 as well.