I'm pretty sure your problem (or at least the one causing this particular error) is here:
git clone git://localhost:repositories/project.git
If you look at the list of url notations in man git push you'll see the relevant example:
git://host.xz[:port]/path/to/repo.git/
With the colon, you're using "repositories" as the port name, and git (understandably) has trouble connecting to port repositories on local host! What you're looking for is:
git://localhost/path/to/repositories/project.git
or perhaps
git://localhost/~user/repositories/project.git
Edit:
I probably should've said this from the start, but I can't actually think of a reason you'd need to use SSH tunneling with git. Its default transport protocol is ssh; the git protocol is really only present to allow public repositories to be fetched from without an account. If you can SSH into the machine where the repository is located, you can just fetch via ssh:
git clone ssh://[user@]host.xz/path/to/repo.git
git clone ssh://[user@]host.xz/~/path/to/repo.git
git clone ssh://[user@]host.xz/~user/path/to/repo.git