You can also read about that error in
this thread Using Random isnt going to work on DALnet, and may not on some other networks. There are some servers in the ini for mIRC that are no longer working, I would suggest trying something like: /server irc.quakenet.eu.org or /server irc.Prison.NET or /server 193.109.122.4
I tried eu.undernet.org (yes, on 6667) and got connected, but it was slow to connect to, so you mite want to go to files/options/connect/options, click on the retry button and increase your "If not connected within ___secs" a little bit.
When i connected using the numberical, it connected a lot faster.
Im not sure what you mean by your localhost is an old one, but in file/options/connect/localinfo, clear both boxes and let mIRC try to grab the correct info itself.