[Kyttias]

Alright, see, you're asking 127.0.0.1 to redirect to www.mysidia.localhost, but 127.0.0.1 is not your site, as in your config file you've put in 127.0.0.1:8080. Try updating your hosts file to reflect 127.0.0.1:8080. And once you're done, update Mysidia's config file to have the domain be to what you've got in your hosts file!

There a number of things that can go wrong. Virtual hosts must be enabled in httpd.conf, and then what you have above (more or less) should be, of course, in httpd-vhosts.conf -- and you have to make sure these are the right copies of these files in the XAMPP installation, because I know for certain WAMP keeps backups and editting those won't help (so long as you followed a guide, you're good).

My virtual hosts set up is like this:

<Directory C:/Users/Kyttias/Dropbox/WAMP>
    Order Deny,Allow   
    Allow from all 
</Directory>

<VirtualHost *:80>   
    DocumentRoot "C:\Users\Kyttias\Dropbox\WAMP\Sanctuary"
    ServerName sanctuary.dev
    ServerAdmin kyttias@gmail.com
    ErrorLog "logs/Sanctuary-error.log"
    CustomLog "logs/Sanctuary-access.log" common
</VirtualHost>

(One of many, anyway.) You have ServerAlias in yours, I've never used that. But my ServerName matches what's in the host file exactly, and yours does not. =/

My hosts for this would be (lines for this example only):

127.0.0.1       localhost
127.0.0.1       sanctuary.dev

And then my Mysidia inc/config.php file is now using:

define('DOMAIN', 'sanctuary.dev');             //Your domain name (No http, www or . )

But I'm not using 8080. You could always try reconfiguring XAMPP to not need 8080, if you haven't given that a shot. I honestly have no experience with 8080 or needing to work around it.

At some point or another you'd be better of seeking help from people who understand the problem... I can really only help people working with WAMP under a standard port 80.