It's not a DNS problem; 1) the eth0 link isn't necessary; 2) 127.0.0.1 doesn't need /etc/hosts; 3) the name of the machine would return 127.0.1.1 via /etc/hosts.
It's not a DNS problem; 1) the eth0 link isn't necessary; 2) 127.0.0.1 doesn't need /etc/hosts; 3) the name of the machine would return 127.0.1.1 via /etc/hosts.