The story starts (I'm shortcutting here) with an [Please control your cussing] insulting everyone on the IRC channel. Most people there believed it was rather funny, but it got even more funny. For information: The dangerous hacker is called bitchchecker and the one being hacked and original author of the comments, who is talking here, is known as Elch. 127.0.0.1 is always the IP-adress of the computer you're currently using, any request there will return to your computer.
If you can follow 3l3t3 h4x0r d00d slang, this is pretty funny: Some loudmouth on an IRC channel threatening to wipe out someone's else's hard drive and managing instead to kill his own. (I have my doubts about this -- I've never accidentally or on-purpose reformatted my HD while online, but I'd think that the Internet connection would be severed early in the process. The dialogue seems authentic enough, though.)