Did a bit more digging around here and solved the problem--my "hosts" file was configured in a way that didn't allow C2 to use the localhost address. Just in case someone else is having a similar problem, here are the steps I took to fix the issue:
First, I located the folder that contained my 'hosts' file (c:/windows/system32/drivers/etc/) and opened the actual file using Notepad++ (but Notepad will do, if that's what you've got). In my case, there were two entries near the top that were of particular interest to me:
#127.0.0.1 localhost
#::1 localhost
Notice the '#'? That means it's a comment (i.e doesn't do anything). Delete the #'s. I had a couple entries following this one that were NOT commented out, but used the same address (127.0.0.1). I'm fairly sure I'll need them later, so I simply put the pound symbol (#) next to those to comment them out, as well as save them if I need them later. Finally, I saved the 'hosts' file.
HTTP preview now works, as does the mirroring/flipping <img src="smileys/smiley36.gif" border="0" align="middle" />
thanks man! I was having a bad time trying to figure out why the preview wasn't working anymore. It bring me another problems but I'll look at it later.