Try checking the port numbers. On the VLM and in the local client NI License Manager. I've seen this happening when the port numbers do not match, and also, when the same port number is used by another application, so you can also try changing the port number in case another server is using that one.
The other possible thing could be a firewall maybe. If you do have a firewall, give an exception to the NI VLM and NI License Manager.
I did try that. On my volume license manager, it's set to 27000, I went to my local license manager and tried to change it to PBAS11:27000 and it still didn't work.
Are the server and client on different domains?...
Check this KB, it explains the different cases in which the client is not able to communicat to the server:
Andy, please check the steps in the following KB:
I'm particularly interested in the telnet test, but try all the suggestions and if you cannot get it to work, follow the instructions on how to prepare log files and screenshots so you can send those to email@example.com and escalate the issue.