It is not an issue with the host address. it is because the server sdo not allow for remote connections. MySQl does not as default. it is also not a problem with SQLyog. Any client would face the same issue.
I think the error you get is “1045”. If so please read this FAQ:
http://faq.webyog.com/content/23/18/en/error-no-1045-connection-denied.html
“User is not allowed to connect from the actual host. Note that MySQL by default only allows connection from ‘localhost’. To specify from where a user may connect SQL wildcards (% and _) can be used. Simply ‘someuser@%’ means that user ‘someuser’ may connect from everywhere.”
If you execute “SELECT host, user FROM mysql.user;” you will probably find that user is declared a a localhost-user.
Relevant MySQL documentaton page: http://dev.mysql.com/doc/refman/5.5/en/account-names.html