Comment 25 for bug 998712

What this particular bug looks like is that after trying to resolve s4. (as a TLD of some sort), dnsmasq simply returns NXDOMAIN (as it should). Then libc goes and tries to resolve the names with the search domains appended and that somehow also fails (or it's never tried).

I wonder if this could be due to specific settings in /etc/nsswitch.conf or in /etc/hosts?

If however this is time-sensitive, as in, not working when NetworkManager is restarted but eventually starts working again after a few minutes, then it would be an issue with how dnsmasq gets restarted when routes are added or addresses changes (especially with IPv6). It warrants more investigation. FWIW, I think those issues are fixed in Quantal too, so testing with a LiveCD would be appreciated.