It could also mean that the specific server you want to connect to is no longer at that IP/Host. When you are connected to the same network try /links to see what servers are linked to the network. Also try /dns to see what IP resolves for the server you are trying. If the DNS has been changed to say to stave off a DDoS flood then you will be trying to connect to yourself instead of the IRC Server. Since you don't have anything accepting connections you should get a "connection refused" or the more likely "connection timed out" error.

The error does mean that some machine is reachable at that IP address, but that it closed the connection after it was made.

zaz @ DALnet #mIRC & #HelpDesk