I see it as an existential test. If you ping localhost, and it doesn't answer, is anything at all real anymore? ARE we living in a DREAM?? IISS ITt 4LL MANOFACTURED TROoTH????

Good idea. Will try this in my next lucid dream instead of pushing the light switch

This should be the film's slogan, methinks. ;-)

Is it even possible for a ping to localhost to time out?

Change the localhost entry in the hosts file, for one.

Shoot yourself in the foot with iptables.

Had the IP stacked borked once too.

If the hardware is damaged, yes.