The diagnostics is misleading. Do not use that functionality in the LMTOOLS.
Assuming you got the license .LIC file from Autodesk/Reseller and configured LMTOOLS properly, you should be in good shape. If the license manager and the client are on the same machine, then you're likely experiencing an IPv6 issue or firewall port blocking. This is especially true on Windows 7 or Server 2008 installations.
For more information about Network License Manager connectivity issues and IPv6, please see my discussion post here: