so i removed teh 127.x.x.x. entry and kept the hostfile contents similar on both nodes. Now previous error is reduced to this one:
------ START OF OUTPUT -------
....some HPL startup string (no final result)
...skip.....
===================================================================================
= BAD TERMINATION OF ONE OF YOUR APPLICATION PROCESSES
= EXIT CODE: 9
= CLEANING UP REMAINING PROCESSES
= YOU CAN IGNORE THE BELOW CLEANUP MESSAGES
===================================================================================
[proxy:0:0@weiser1] HYD_pmcd_pmip_control_cmd_cb (./pm/pmiserv/pmip_cb.c:886): assert (!closed) failed
[proxy:0:0@weiser1] HYDT_dmxu_poll_wait_for_event (./tools/demux/demux_poll.c:77): callback returned error status
[proxy:0:0@weiser1] main (./pm/pmiserv/pmip.c:206): demux engine error waiting for event
[mpiexec@weiser1] HYDT_bscu_wait_for_completion (./tools/bootstrap/utils/bscu_wait.c:76): one of the processes terminated badly; aborting
[mpiexec@weiser1] HYDT_bsci_wait_for_completion (./tools/bootstrap/src/bsci_wait.c:23): launcher returned error waiting for completion
[mpiexec@weiser1] HYD_pmci_wait_for_completion (./pm/pmiserv/pmiserv_pmci.c:217): launcher returned error waiting for completion
[mpiexec@weiser1] main (./ui/mpich/mpiexec.c:331): process manager error waiting for completion
------ END OF OUTPUT -------