I was checking back through old posts I had responded to and came across yours. Did you ever get this working?

Some other thoughts:
1. INETD
You could change your /etc/hosts.allow file to have all ftp accepted by putting this into the file:
in.ftpd: ALL

You wrote:
this is all I see when I check inetd.conf file:
ftp stream tcp nowait root /usr/bin/in.ftpd

The entry should have one more piece:
ftp stream tcp nowait root /usr/bin/in.ftpd in.ftpd

Insure no spaces at the begining of the line or at the end (actual case in SunSolve mentioned this error)

Insure that /etc/inet/inetd.conf is linked from /etc/inetd.conf.
# ls -l /etc/inetd.conf
lrwxrwxrwx 1 root root 17 May 7 2001 /etc/inetd.conf -> ./inet/inetd.conf

2. RESOLV.CONF
Did you check your /etc/resolv.conf to point to the correct nameserver? Are you running bind on the ftp server? If so, was it stopped and restarted (Solaris will cache entries and ignore changes in DNS - caching only servers are needed on the server if you use any round robin).

3. REBOOT
Last resort - reboot and see if the problem goes away. Could have cached other info which is interfering (arp table, network routes,...)