I've faced with problem that I can't connect to Azure ILB port from VM in the backend. eg. Created ILB (10.0.0.100) with 1 VM (backend_vm) as backend and open port, say 1111. Other VMs can telnet on 10.0.0.100 1111 nice, but VM (backend_vm) can't connect to 10.0.0.100 1111. No firewalls, security groups in IF allows connections from ANY source ...
According to your description, I test in my lab. I meet same issue with you. If I
telnet 127.0.0.1 80 on the two VMs. It works. When I test in other VMs, it also works. However, when I
telnet loadbalanceinternalip 80 in the pool member VMs. It connects timeout on one VM.
Based on my knowledge, it is a except behavior. Internal load balancer configurations do not offer SNAT today. In turn, an internal load balancer configuration does not allow a pool member to access the IP address of the internal load balancer.