makes sense. The list is showing you what you have typed in not what is avaliable. Run CMD PING [server name], assuming the server name and the instance name are the same. Then try using the IP address that you will get from pinging to try to connect. Else you can try to add the server name in the HOST file but lets see if the IP address works first.

Also Can you open this instance of SQL Server using ISQL (QA)? (Using the same login and server source if possible)