Is Na'vi language from Avatar based on any known language?

James Cameron basically hired a linguistics specialist to create an entire functioning language. Paul Frommer spent about 4 years on creating it and he is still expanding the language today.

Frommer has spent four years laboring on the language of the Na’vi tribe and his work will not end on the day of the film’s release. He plans to keep expanding the language until he’s, well, blue in the face.

James Cameron wanted a new language, not an existing one, that's why it's so hard to pronounce some words.

The actors who had bend their tongues around the invented vocabulary and syntax were slightly less charmed by the experience.

To answer your question is it based on any known language?

Yes, Polynesian languages while omitting common Western sound:

Frommer based some Na'vi grammar on Polynesian languages and used consonants such as ejectives and word-initial velar nasals that do not occur in Western languages, while omitting common Western sounds like "b", "d" and "g". He placed verb modifiers in the middle of words, instead of at the beginning or end of them. Cameron wrote some songs for the Na'vi characters that Frommer translated into a poetic form of Na'vi language, and he then coached the singers on pronunciation. He then worked personally with the actors who needed to speak the Na'vi language in the film and created MP3 files for them to use to study it. The actors' voices were not altered in the film, as Cameron wanted the Na'vi characters to have human-sounding voices. Since the film opened, Frommer has received numerous e-mails from fans with suggestions for expanding the language and websites have grown up devoted to the study and use of the language.

You can even learn Na'vi here