Let $1 \to N \overset{\iota}{\to} G \overset{\pi}{\to} G/N \to 1$ be a short exact sequence of topological groups. Here, $\iota$ is the inclusion of a closed, normal subgroup and $G/N$ has the quotient topology.
Question 1: If $N$ and $G/N$ are locally compact (Hausdorff) groups, is $G$ also a locally compact group?
In fact, I would be perfectly satisfied with an answer to:
Question 2: If $N$ is a compact group and $G/N$ is a locally compact group, is $G$ a locally compact group?
If the quotient map admits a continuous local section $s :W \to G$ defined on a neighbourhood $W$ of $1 \in G/N$, then one easily checks that $G$ is locally homeomorphic to $N \times (G/N)$, so the answer to both questions is "yes". However, as noted here, the existence of such a section is not guaranteed, even if all of $G,N,G/N$ are compact. One may take $G = \mathbb{T}^\mathbb{N}$, $N = \{\pm 1 \}^\mathbb{N}$.
It's at least easy to check that $G$ is Hausdorff. Since $\{1\}$ is closed in $N$, and $N$ is closed in $G$, we know that $\{1\}$ is closed in $G$. Thus, the diagonal $\Delta = \{ (x,x) : x \in G\}$ is closed in $G$, because it is the primage of $\{1\} \subseteq G$ under the continuous map $(x,y) \mapsto xy^{-1} G \times G \to G$.
It seems to me the answer to Question 2 (the title question, and the simpler of the two) is "Yes". Suppose that $N$ is compact and $Q = G/N$ is locally compact. It's easy to check $G$ is Hausdorff (done in the post), so we just need to show that some point of $G$, say $1_G$, has a compact neighbourhood.
Notes to get started:
So, we will have shown the answer to Question 2 is "Yes" once we prove the following proposition.
I suspect that one can push these ideas a little further to get a positive answer to the (more general) Question 1, and will attempt to do so. The immediate obstacle is the lack of an obvious candidate for a compact neighbourhood in $G$.
Added: I found a reference answering the more general Question 1. On pp.39 of Abstract Harmonic Analysis I by Hewitt and Ross, one finds the following theorem.
Added: This is discussed at the following mathoverflow post, where user27920 gives an argument using nets.