That is as it should be after you have run the Mail Protection Wizard, avast's Internet Mail provider uses this local proxy (127.0.0.1) to first examine your email, then it arrives in your inbox (if clean).
I assume that you are getting errors when you are trying to collect or send your email, etc. please paste the contents of the error or use a screen shot of the error.
This is more likely to be your firewall blocking ashMaiSv.exe (avast's email scanner), ensure your firewall allows this file and what is your firewall ?