Sk,
you have reason, localhost is only when oracle and aolserver are in the same machine. sorry, but I didn't read it before.
If you can connect with sqlplus and add the lines in Datasource work but you aren't connecting with database with the name then I think that tnsnames.ora aren't reading correctly by aolserver.
are Oracle environment variables for web user write correctly?
Review TNS_ADMIN variable and check persmissions for the folder and file.
