What do you mean by
I have made changes to /deploy/cluster-service.xml to reflect the IP addresses of the two nodes.
You should be able to run two nodes at the same system if you start with '-b <bind-ip>' if you have different NIC or virtual IP addresses.
Could you figure out the chances? The deploy/cluster-service.xml is a JBoss 4.x configuration !?!?
Aha. I pulled my config files from a 4.2.3 version of Jboss I was previously running as a single node and this file got pulled as well. Problem solved. I appreciate the help.